Which of the following will most likely happen when a person's income increases, other things being equal?
A)The budget line will shift outward.
B)The indifference curves will shift downward.
C)The indifference curves will shift outward.
D)The budget line will become steeper.
E)The budget line will become flatter.

Question

Quizplus · Accepted Answer

When a person's income increases, their purchasing power increases, which means they can afford more goods and services. This leads to the budget line shifting outward, allowing the person to consume more of both goods.

Which of the Following Will Most Likely Happen When a Person's