When an individual's income increases, the budget constraint:
A)shifts straight out, maintaining the same slope.
B)shifts straight in, maintaining the same slope.
C)rotates out and becomes flatter.
D)rotates in and becomes steeper.

Question

Quizplus · Accepted Answer

When an individual's income increases, the budget constraint shifts straight out but maintains the same slope, reflecting the increased ability to purchase goods without changing the relative prices of those goods.

When an Individual's Income Increases, the Budget Constraint