Answer to Question #148635 in Microeconomics for Bushra

Question

Why budget line rotate clockwise or anticlockwise?

Answer 1

When the price of the good with price along x axis increases in comparison with the other good, the budget constraint rotates clockwise. This is because the budget can no longer buy as much of the first good. When the other good's price increases, the constraint rotates anticlockwise, indicating fewer bought.