Suppose William can choose between the consumption of two goods. If we observe that William's budget constraint has moved inward, then we know for certain that
A)his income must have decreased.
B)he will be indifferent between the two goods.
C)the price of one or both of the goods must have increased.
D)his utility will decrease.

Question

Quizplus · Accepted Answer

The Answer of Suppose William can choose between the consumption of two goods. If we observe that William's budget constraint has moved inward, then we know for certain that
A)his income must have decreased.
B)he will be indifferent between the two goods.
C)the price of one or both of the goods must have increased.
D)his utility will decrease.

Suppose William Can Choose Between the Consumption of Two Goods