An increase in a consumer's income will cause the budget line to
A) Shift outward
B) Shift inward
C) Become steeper
D) Become flatter

Question

Quizplus · Accepted Answer

When a consumer's income increases, their purchasing power increases, allowing them to buy more goods and services. As a result, the budget line shifts outward to reflect the increased quantity of goods and services they can afford to purchase.

An Increase in a Consumer's Income Will Cause the Budget