Which of the following statements is true?
a. When a change in income causes consumption to change, the consumption-income line shifts; however, when anything besides income changes, we move along the line.
b. When a change in income causes consumption to change, we move along the consumption-income line; however, when anything besides income changes, the line shifts.
c. When income or anything else affecting consumption changes, we move along the consumption-income line.
d. When income or anything else affecting consumption changes, the consumption-income line shifts.
e. There is no way to determine, without more information, whether a change in income or anything else will shift the consumption line or cause movement along the consumption-income line.
B
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What is the equilibrium price of a good or service?
What will be an ideal response?
If goods X and Y are such that the cross price elasticity between them is negative, and if the income elasticity of X is negative, then these goods are:
a. inferior complements. b. luxury complements. c. income elastic substitutes. d. normal substitutes. e. income elastic complements.