What will a consumer buy if there is a shift outward in the budget constraint
A)less of normal goods and more of inferior goods
B)more of normal goods and less of inferior goods
C)more of both normal goods and inferior goods
D)less of both normal goods and inferior goods

Question

Quizplus · Accepted Answer

An outward shift in the budget constraint means the consumer now has more purchasing power. Therefore, they are likely to buy more of normal goods and less of inferior goods. This is because normal goods are of better quality and as the consumer's income increases, they tend to buy more of such goods. Inferior goods, on the other hand, are of inferior quality and as the consumer's income increases, they tend to buy less of such goods.

What Will a Consumer Buy If There Is a Shift