The path connecting optimal consumption bundles that shows how a consumer changes the quantity demanded of specified goods as income changes and prices remain constant is called the
A) price-consumption path
B) nonsatiation-convexity path
C) income expansion path

Question

Quizplus · Accepted Answer

The path described is known as the "income expansion path" because it shows how a consumer's consumption choices expand or contract as their income changes while prices remain constant. The price-consumption path shows how changes in prices affect the quantity demanded of goods, while the nonsatiation-convexity path illustrates the consumer's preference for combinations of goods that are both desirable and affordable.

The Path Connecting Optimal Consumption Bundles That Shows How a Consumer