An Increase in Consumer Income Will

question 187

Multiple Choice

An increase in consumer income will

• A) shift the budget constraint and increase its slope.
• B) reduce consumption of all normal goods.
• C) pivot the budget constraint on the axis with the good that has the higher price.
• D) shift out the budget constraint and increase the consumption of both goods, if they are normal goods.

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Definitions:

Merchandise Inventory

Goods or products that a retailer, wholesaler, or distributor holds for the purpose of resale to customers.

Debit

An accounting entry that increases asset or expense accounts, or decreases liabilities or equity accounts, recorded on the left side of an accounting ledger.

Merchandise Inventory

Goods and products that a retailer or wholesaler has on hand to sell to customers.

Buyer

A person or organization that purchases goods or services for personal use or consumption.