Which of the Following Describes What Happens to a Consumer's

question 25

Multiple Choice

Which of the following describes what happens to a consumer's budget line if that consumer's budget increases?

• A) The budget line becomes more horizontal.
• B) The budget line becomes steeper.
• C) The budget line shifts further away from the origin of the graph.
• D) The budget line shifts closer to the origin of the graph.
• E) The budget line does not change.

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Definitions:

Indifference Curves

Graphical representations that illustrate combinations of goods that provide the same level of utility or satisfaction to a consumer.

Demand Curve

A graphical representation showing the relationship between the price of a good or service and the quantity demanded for a given period.

Consumer Equilibrium

A state where an individual has allocated their income in a way that maximizes their utility, given the prices of goods and services and their preferences.

Indifference Curves

Graphical representations in microeconomics that show different bundles of goods between which a consumer is indifferent.