Question

If the price of good x, situated on x axis falls then budget line:(
A. Shift towards right hand side
B. Shift towards left hand side
C. Rotate on x-axis towards right hand side
D. Rotate on x-axis towards left hand side​

Answer 1

Answer:

Ans- B.Shift towards the left hand side.

Answer 2

Option C is the correct answer.

If the price of good x, situated on x axis falls then budget line  will rotate on x-axis towards right hand side.

1. If the price of good x falls then there is increase in the real income of the consumer.
2. But since the price of only one commodity has decreased therefore the budget line will only shift rightwards for that commodity.
3. if the price of both commodities had decreased then the entire budget line would have shifted rightwards.