a decrease in money income an increase in money income an in

a decrease in money income.

an increase in money income.

an increase in the price of Good 1 and no change in the price of Good 2.

a decrease in the price of Good 2 and no change in the price of Good 1.

a decrease in money income.
		an increase in money income.
		an increase in the price of Good 1 and no change in the price of Good 2.
		a decrease in the price of Good 2 and no change in the price of Good 1.

B D Good 1 Refer to the above graph. The shift of the budget line from AB to CD is consistent with:

Solution

The correct answer is option B because increase in income will shift the budget constraint outward as we will be able to buy more of each good at all the prices.