If income increases,then the:
A) budget line rotates counterclockwise.
B) budget line rotates clockwise.
C) budget line shifts to the right.
D) opportunity set contracts.

Question

Quizplus · Accepted Answer

When income increases, the budget constraint shifts to the right, allowing the consumer to purchase more goods and services than before. Therefore, option C is the correct choice. Options A and B refer to the rotation of the budget line, which is not affected by changes in income. Option D, which suggests that the opportunity set contracts, is incorrect because the opportunity set expands as income increases, not contracts.

If Income Increases,then The