Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases and the price of CDs increases, her new budget constraint could be

A) CD.
B) BD.
C) AD.
D) Both B and C are correct.

Budget Constraint

The limitations on the consumption choices of an individual or household as a result of limited income and finite prices of goods and services.

CDs

Compact Discs, a digital optical disc data storage format that was widely used for storing music and other data.

Income

The financial gain received by an individual or entity, typically through wages, investments, or other sources, over a specific period of time.