If the consumer's income increases while the prices of both goods remain unchanged, what will happen to the budget line?
A) The budget line rotates inward from the intercept on the horizontal axis.
B) The budget line rotates outward from the intercept on the vertical axis.
C) The budget line shifts inward without a change in slope.
D) The budget line shifts outward without a change in slope.
D
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Necessities and luxuries are both types of normal goods
a. True b. False
The idea that MPCs are different in different stages of a person's life is called
a. Keynes's absolute income hypothesis b. Duesenberry's relative income hypothesis c. Friedman's permanent income hypothesis d. the life-cycle hypothesis of consumption e. the consumption function
A call option is in the money if the futures price is greater than the strike price.
a. true b. false
Draw a graph of the monopolistic competitor in the long run in the graph below.
