If the price ratio increases, the budget line .

shifts up

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shifts down

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pivots upward

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pivots downward

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Solution

The correct option is D pivots downward
If the price ratio increases, the budget line pivots downward. This happens because the price ratio measures the slope of the budget line.

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Similar questions

A consumer consumes only two goods. If the price of one of the goods falls, what happens to the indifference curve?

a. Shifts upwards

b. Shifts downwards

c. Can shift both upwards or downwards

d. Does not shift

If at the market equilibrium, the supply is a vertical line and the downward sloping demand curve shifts to the right, then:

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