budget line

How Does Change In Income Affect Budget Line?

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How Does Change In Income Affect Budget Line? Changes in income affect a consumer ́s choice. The new equilibrium for a greater income is higher on the budget line because the increased income allows the consumer to purchase more of both products. Higher income increases affordability of the goods, while lower income decreases it. What

What Happens To Budget Line If Income Increases?

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What Happens To Budget Line If Income Increases? When there is an increase in income, a consumer can buy more of both goods and this shows an outward i.e. rightward shift in the budget line. On the other hand, when there is a decrease in income, the consumer’s consumption possibility decreases, and the budget line