In the diagram, the consumer budget line shift from JK to GH. What can definitely be deduced from the diagram?
The correct answer is B. There has been a reduction in the price of both A and B
Since a budget line imposed a constraint on an individual budget that he cannot buy more where the constraint is. An increase in income will make the consumer income higher that the price of the commodity which leads to shift in budget line from JK to GH
Previous question Next questionWhat is Exam without Practice? With our customizable CBT practice tests, you’ll be well-prepared and ready to excel in your examsStart Practicing Now