Answer :
If one of the products a consumer buys rises in price, the consumer's budget line will shift farther away from the origin of the graph and not change its slope. The correct answer is c.
To understand why, let's first define what a budget line is. A budget line represents all the possible combinations of two goods that a consumer can afford given their income and the prices of the goods. It shows the trade-off between the two goods.
Now, if the price of one of the products a consumer buys rises, it means that the consumer needs to spend more money to purchase that product. This increase in price reduces the consumer's purchasing power for that specific product.
As a result, the consumer's budget line will shift outward, away from the origin of the graph. This is because the consumer can now afford fewer units of the product with the same amount of money. The budget line will pivot around the quantity axis, with the intercept on the quantity axis moving to the left.
It's important to note that the slope of the budget line represents the relative price of the two goods. Since the price of the other product remains constant, the slope of the budget line does not change. The slope remains constant, indicating the trade-off ratio between the two goods remains the same.
In summary, when the price of one of the products a consumer buys rises, the consumer's budget line will shift farther away from the origin of the graph, indicating a decrease in the quantity of the product that can be purchased. However, the slope of the budget line remains unchanged, representing the constant trade-off ratio between the two goods.
Learn more about the Budget line:
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