A consumer prefers more to less of every good.Her income rises, and the price of one of the goods falls while other prices stay constant.These changes must have made her better off.

Question

Quizplus · Accepted Answer

When the consumer's income rises, she can afford to purchase more of every good. If the price of one good falls while other prices stay constant, she can now purchase even more of that particular good with her higher income. This increase in purchasing power and ability to consume more of every good makes her better off, indicating that the statement is true.

A Consumer Prefers More to Less of Every Good