If the consumer's income and all prices simultaneously double,then
A)the optimum consumption bundle will shift outward relative to the old optimum.
B)the optimum consumption bundle will move leftward along the old budget constraint.
C)the optimum consumption bundle will not change.
D)the optimum consumption bundle will shift inward relative to the old optimum.

Question

Quizplus · Accepted Answer

When both income and prices double, the budget constraint remains unchanged in terms of relative prices and purchasing power, so the optimum consumption bundle does not change.

If the Consumer's Income and All Prices Simultaneously Double,then