An increase in a consumer's budget
A) changes the relative prices of the goods.
B) changes the slope of the budget line.
C) decreases consumption possibilities.
D) increases consumption possibilities.
E) has no effect on the consumer's budget line.

Question

Quizplus · Accepted Answer

An increase in a consumer's budget will shift the budget line outward, increasing the amount of both goods that can be purchased. This means that there will be an increase in consumption possibilities, making option D the correct answer.

An Increase in a Consumer's Budget