A rightward shift of the budget line is caused by a
Answer Details
A rightward shift of the budget line is caused by a rise in the commodity relative price.
The budget line shows the various combinations of goods and services that a consumer can afford to buy given their income and the prices of the goods. The slope of the budget line represents the relative price of the two goods, which is the amount of one good that must be given up to purchase an additional unit of the other good.
A rightward shift of the budget line means that the consumer can now afford to buy more of both goods than before. This could happen if there is a rise in the commodity relative price, which means that the price of one of the goods has become relatively more expensive compared to the other.
For example, suppose a consumer has a fixed income and can buy either apples or bananas. If the relative price of apples increases, the consumer will have to give up more bananas to buy the same amount of apples as before. As a result, the budget line shifts to the right, indicating that the consumer can now afford to buy more of both apples and bananas.
On the other hand, if the relative price of bananas were to increase instead, the budget line would shift to the left, indicating that the consumer can now afford to buy less of both apples and bananas.