This quiz is a part of the CFA Level 1 reading 'Topics in Demand and Supply Analysis'. 

Demand and Supply

Ranks from most preferred to least preferred

The budget line rotates inward from the intercept on the axis of the good that did not change in price. 

The budget line rotates outward from the intercept on the axis of the good that did not change in price. 

The budget line shifts inward without a change in slope. 

The budget line rotates inward from the intercept on the horizontal axis.

The budget line shifts inward without a change in slope.

The budget line shifts outward without a change in slope.

Income effect: negative; Substitution effect: negative

Income effect: Positive; Substitution effect: negative

Income effect: negative; Substitution effect: Positive

The substitution effect is in the opposite direction to the income effect.

The substitution effect overwhelms the income effect.

Demand and Supply Analysis: Consumer Demand