Final answer:
Parallel shifts in the budget line are not used to derive the demand curve; instead, a change in the price of a good causes the budget constraint to rotate, affecting the quantity demanded.
Step-by-step explanation:
The statement that parallel shifts in the budget line are considered when deriving the demand curve for a good is false. Rather, changes in the price of a good lead the budget constraint to rotate, which in turn affects the quantity that is demanded of that good. This is because the budget constraint represents the tradeoffs between two goods, and a rotation occurs when the price of one good changes while the consumer's income and the price of the other good remain constant. As the price of the good in question rises, the budget constraint rotates inwards, indicating that less of the good can be purchased given the consumer's budget. The choices that maximize utility change accordingly, leading to a different quantity demanded at each price, which is graphically represented on the demand curve.