Question

Theodore's budget line has changed from A to B. Which of the following explains the change in Theodore's budget line?

A) The price of food and the price of clothing decreased.
B) The price of food and the price of clothing increased.
C) Theodore's income increased.
D) Theodore's income decreased.

Answer 1

Theodore's budget line has changed from A to B because his income increased.

Step-by-step explanation:

A change in Theodore's budget line from A to B represents a change in his income. The correct answer is option C) Theodore's income increased. When income increases, the budget constraint shifts outward, allowing Theodore to purchase more goods and services.