Other things equal, an increase in a consumer's money income
A) increases the amount of utility a consumer receives from a given quantity of a good.
B) shifts the individual's budget line rightward because she can now purchase more of both products.
C) eliminates the individual's economizing problem.
D) causes the consumer to choose a different combination of goods along a given budget line.

Question

Quizplus · Accepted Answer

An increase in a consumer's money income would shift the budget line rightward, as they can now afford to purchase more of both products. This does not affect the amount of utility the consumer receives from a given quantity of a good, nor does it eliminate the individual's economizing problem. It may cause the consumer to choose a different combination of goods along a given budget line, but the specific choice would depend on their preferences and the price of the goods.

Other Things Equal, an Increase in a Consumer's Money Income