Which statement correctly uses the concept of a household budget constraint to explain the high level of consumer spending on days such as Black Friday in the United States or Singles' Day in China?
A) Employers typically give employees big bonuses on those shopping days, so income increases and the budget line shifts outward.
B) Consumers gain more utility from goods on those shopping days because they have greater need for the goods at that time of year.
C) There is no change in the household budget line on those shopping days, but the price decreases cause consumer utility to increase on these days.
D) Sellers reduce the prices of many products on those shopping days, effectively shifting the household budget line outward temporarily.

Question

Quizplus · Accepted Answer

Sellers reducing prices on days like Black Friday or Singles' Day effectively allows consumers to buy more with the same amount of income, which can be represented as an outward shift in the household budget line for the duration of the sale, illustrating why consumer spending is high on these days.

Which Statement Correctly Uses the Concept of a Household Budget