When the price of a good increases with other things unchanged, the real income of the consumer:
A) is unchanged.
B) increases.
C) decreases.
D) None of the statements is correct.

Question

Quizplus · Accepted Answer

When the price of a good increases, the purchasing power of the consumer's income decreases. This means that the consumer can afford to purchase fewer goods than before, which leads to a decrease in real income. Therefore, option C is the correct choice.

When the Price of a Good Increases with Other Things