In what direction will a decrease in income cause a shift in the budget constraint
A)outward
B)toward the good most consumed
C)toward the good least consumed
D)inward

Question

Quizplus · Accepted Answer

A decrease in income will cause the budget constraint to shift inward because the consumer will have less money to spend overall. This means that they will have to consume less of both goods, and the budget set will shrink accordingly.

In What Direction Will a Decrease in Income Cause a Shift