An increase in income will cause a shift in the budget constraint
A)outward.
B)towards the good most consumed.
C)towards the good least consumed.
D)inward.

Question

Quizplus · Accepted Answer

An increase in income will shift the budget constraint outward, meaning that the individual can afford to buy more of both goods. This is because the individual now has more purchasing power and can increase their consumption of both goods.

An Increase in Income Will Cause a Shift in the Budget