WGU C211 CH 21 QUESTIONS AND ANSWERS

The opportunity cost of one good relative to another reflects: The slope of the budget constraint. Assume that an individual's budget decreases and that prices remain constant. What would happen to his/her budget constraint? The budget constraint line would Shift inward in a parallel manner Observing an individual's indifference curve demonstrates his/her Preferences Assume that Bob's income increases following a promotion at work, but prices do not change. What will happen to Bob's budget constraint? It will shift outward, parallel to its initial position. How will an increase in income affect the budget constraint, assuming that prices remain the same? Shift outward. What is a good called that consumers buy less of when their income increases? Inferior good. What is true of indifference curves? The consumer's preferences are represented with indifference curves.