Question

Write true or false with a reason:

Increase in income of the consumer is the only cause that leads to a parallel shift of budget line to the right.

• A. True
• B. False

Answer 1

The correct option is B False

Budget line shifts to right

(i) when income of consumer increases assuming price of two goods remains unchanged, and

(ii) when there is proportionate fall in the prices of two goods, income of the consumer remaining unchanged.