If the consumer's income and all prices simultaneously decrease by one-half,then the optimum consumption will
A) shift outward relative to the old optimum.
B) move leftward along the old budget constraint.
C) shift inward relative to the old optimum.
D) not change.

Question

Quizplus · Accepted Answer

The consumer's optimum consumption will not change because both income and prices decrease proportionally, leaving the relative prices and real purchasing power unchanged.

If the Consumer's Income and All Prices Simultaneously Decrease by One-Half,then