An increase in money income shifts the consumer's budget line to the right. increases the slope of the budget line. shifts the consumer's budget line to the left. has no effect on the budget line.
Added by Neil L.
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The budget line is drawn with one good on the x-axis and the other good on the y-axis. The slope of the budget line is determined by the ratio of the prices of the two goods. Show more…
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For a rational consumer who has to choose between two goods in the context of budget constraints, the price change of one of the goods, ceteris paribus (i.e the other things remain the same) will determine: a parallel shift of the budget line to the right a parallel shift of the budget line to the left a change in the slope of the budget line no change in the budget line
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If a consumer is initially in equilibrium, an increase in money income will Multiple Choice move the consumer to a new equilibrium on a lower indifference curve. move the consumer to a new equilibrium on a higher indifference curve. make the slope of the consumer's indifference curves steeper. have no effect on the equilibrium position.
Andrew D.
If income increases, ceteris paribus, the budget line rotates clockwise. makes a parallel shift to the left. makes a parallel shift to the right rotates counterclockwise.
Oluwadamilola A.
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