Match List-I with List-II

Choose the correct answer from the options given below:

(A)-(III), (B)-(I), (C)-(II), (D)-(IV)

The correct answer is Option (2) → (A)-(III), (B)-(I), (C)-(II), (D)-(IV)

(A) Increase in consumers' income → (III) Parallel and rightward shift in their budget line
When income increases, the consumer can buy more of both goods. The budget line shifts outward (rightward) but remains parallel, as prices are unchanged.

(B) Decrease in price of good on X-axis → (I) Budget line becomes flatter
When the price of good X falls, the consumer can buy more of X for the same income, so the budget line rotates outward, becoming flatter.

(C) Equal increase in price of both goods → (II) No change in the slope of budget line
If both prices rise by the same proportion, the slope (price ratio) remains unchanged, but the budget line shifts inward (not mentioned, but slope unchanged).

(D) Decrease in price of the good on Y-axis → (IV) Budget line becomes steeper
A fall in the price of good Y allows the consumer to buy more of Y, making the budget line steeper.