what-happens-to-the-budget-constraint-and-optimum-consumption-when-a-consumers-i

Question

What happens to the budget constraint and optimum consumption when a consumer's income decreases?

Accepted Answer

The budget constraint shifts inward, leading to a lower indifference curve being tangent to the budget line.

Answer

The budget constraint becomes steeper, indicating a preference for one good over another.

Answer

The budget constraint remains unchanged, but the consumer can choose different combinations of goods.

Answer

The budget constraint shifts outward, allowing the consumer to reach a higher indifference curve.