Consider the consumer's problem with two goods, good X and good Y. Is it possible that the budget line of the consumer, given by the equation pyX + PyY = I shifts to the right and parallel to its original position in (X, Y) plane while the income () remains constant? Provide an analytical explanation for your response. (Hint: the budget line shifts to the right and parallel to its original position when the income I rises and prices constant. This question asks if the prices can change in a certain way that the budget line shifis as if income had increased.)

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
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Chapter3: Preferences And Utility
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Consider the consumer's problem with two goods, good X and good Y. Is it

possible that the budget line of the consumer, given by the equation pyX + PyY =

I shifts to the right and parallel to its original position in (X, Y) plane while the

income () remains constant? Provide an analytical explanation for your response.

(Hint: the budget line shifts to the right and parallel to its original position when

the income I rises and prices constant. This question asks if the prices can change

in a certain way that the budget line shifis as if income had increased.)

 

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