How does this rise in income alter her utility-maximizing choice? Kimberly will again consider the utility and marginal utility that she receives from concert tickets and overnight getaways and seek her utility-maximizing choice on the new budget line, but how will her new choice relate to her original choice?
Utility-maximizing choice
Now, assume that the income Kimberly has to spend on these two items rises to $2,000 per year, causing her budget constraint to shift out to the right.
Source & attribution
Principles of Economics 3e — How Changes in Income and Prices Affect Consumption Choices
OpenStax contributors · OpenStax, Rice University
CC BY 4.0. Text excerpted; whitespace normalised and empty cross-references removed; learning prompts added. No illustrations reproduced.
Source edition: 2024-07-18T12:52:27Z
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