When the price of one good increases and the price of the other good and income are held constant, the budget line

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    shifts parallel to the original budget line so that the new budget line is closer to the origin.
     shifts parallel to the original budget line so that the new budget line is farther from the origin.
     rotates so that the intercept is closer to the origin on the axis representing the good that has experienced an increase in price.
     rotates so that the intercept is farther from the origin on the axis representing the good that has experienced an increase in price.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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rotates so that the intercept is closer to the origin on the axis representing the good that has experienced an increase in price.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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