An increase in income will
A) shift the budget constraint to the right.
B) make the budget constraint steeper.
C) make the budget constraint flatter.
D) make the budget constraint more bowed.

Question

Quizplus · Accepted Answer

An increase in income will shift the budget constraint to the right, since the consumer now has more money to spend on both goods. This means that the consumer can now afford more of both goods at any given price level, resulting in the shift to the right.

An Increase in Income Will