Principles of Microeconomics / Unit 5 MIC 0411 short lesson, about 20 seconds
A Price Change Rotates the Budget Line
Captions available
The idea
A higher price for one good rotates the budget line inward around the other good's intercept, since that price did not change. The affordable set shrinks and the slope steepens.
In practice
Dearer movies pull the movie intercept in and leave the T-shirt intercept fixed.
Where people slip
A rotation changes what is affordable and what each good costs in the other; both effects follow.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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