In Which Way Will an Increase in Income Cause a Consumer's

question 190

Multiple Choice

In which way will an increase in income cause a consumer's budget constraint to change

• A)It will shift outward, parallel to its initial position.
• B)It will shift inward, parallel to its initial position.
• C)It will pivot around the "Y" axis.
• D)It will pivot around the "X" axis.

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Definitions:

Maximum Willingness

The highest amount an individual is prepared to pay for a good or service, reflecting their subjective valuation of its utility.

Output

The total amount of goods and services produced by an economic system or by a firm.

Marginal Benefit

The boost in satisfaction or utility received from consuming one more unit of a good or service.

Efficiency Loss

The reduction in economic efficiency due to factors like market distortions, resulting in resources not being allocated optimally.