Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Theory of Consumer behaviour

Question:
What will happen to the budget line when there is a decrease in prices of two goods say bread and milk?
Options:
Shift rightward parallelly
Shift leftward parallelly
Shift rightward only for milk
Shift rightward only for bread
Correct Answer:
Shift rightward parallelly
Explanation:
Budget line will shift to the right, indicating that more of both the goods can be bought with the same income. As, prices of both the goods have been decreased resulting a parallel rightward shift in the budget line.