If a consumer's income rises,
A)her indifference curves shift inward
B)her indifference curves shift outward
C)her budget line shifts outward
D)her budget line shifts inward
E)the slope of her budget line increases

Question

Quizplus · Accepted Answer

When a consumer's income rises, her budget line shifts outward because she can now afford more of both goods, assuming prices remain constant. Indifference curves do not shift with changes in income; they represent preferences, not constraints.

If a Consumer's Income Rises