If the budget constraint shifts northeast or away from the origin, the consumer can afford:
A) fewer bundles.
B) the same set of bundles.
C) more bundles.
D) sometimes fewer bundles, sometimes more bundles, and sometimes the same number of bundles.

Question

Quizplus · Accepted Answer

When the budget constraint shifts northeast, it means that the consumer's purchasing power has increased. This means that the consumer can now afford more expensive bundles or larger quantities of the same bundle. Therefore, the consumer can afford more bundles than before, making choice C the correct answer.

If the Budget Constraint Shifts Northeast or Away from the Origin