Hold the prices of goods, as well as Amy’s preferences, constant. If Amy’s income increases, then
a. both her indifference curves and budget constraint change.
b. her indifference curves change, but her budget constraint does not change.
c. her budget constraint changes, but her indifference curves do not change.
d. neither her indifference curves nor her budget constraint change.
Ans: c. her budget constraint changes, but her indifference curves do not change.
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