Question

If the price of the good represented on the Y axis increases by 15 percent, that represented on the X axis increases by 10 percent and nominal income increases by 20 percent.

A The budget constraint will shift outwards and become flatter
B The budget constraint will shift outwards and become steeper
C The budget constraint will shift inwards and become flatter
D The budget constraint will rotate and become steeper


20 If the price of the good represented on the Y axis decreases by 15 percent, that represented on the X axis decreases by 10 percent and nominal income decreases by 20 percent.

A The budget constraint will shift outwards and become flatter
B The budget constraint will shift outwards and become steeper
C The budget constraint will shift inwards and become flatter
D The budget constraint will shift inwards and become steeper

Answer 1

If the price of the good represented on the Y axis increases by 15 percent, that represented on the X axis increases by 10 percent and nominal income increases by 20 percent.
B The budget constraint will shift outwards and become steeper

20. If the price of the good represented on the Y axis decreases by 15 percent, that represented on the X axis decreases by 10 percent and nominal income decreases by 20 percent.
C The budget constraint will shift inwards and become flatter