Answer to Question #320327 in Microeconomics for Steve

Question

What will be the budget line if P1 doubles and P2 becomes 8 times larger and income becomes 3times larger

Answer 1

Answer.

The budget line when P1 doubles will experience a proportional change in both the price and income.In so doing,the available badget would remain just like before because the attainable combinations will not change for the consumer.