Asked by Annika Hogstrom on Jul 24, 2024
Verified
A parallel shift in a budget line is caused by changes in a consumer's level of satisfaction.
Parallel Shift
Parallel shift is a concept in economics where a graph, such as a demand or supply curve, shifts left or right without changing its slope, indicating a uniform change in demand or supply.
Budget Line
A line that shows the different combinations of two products a consumer can purchase with a specific money income, given the products’ prices.
Consumer's Level
Refers to the consumption patterns, preferences, and purchasing power of individuals or households within an economy.
- Appreciate the relevance of budget restrictions in the decision-making process of consumers.
Verified Answer
AI
Adelia Ika pramestiJul 29, 2024
Final Answer :
False
Explanation :
A parallel shift in a budget line is caused by changes in income or changes in the prices of both goods, not by changes in a consumer's level of satisfaction.
Learning Objectives
- Appreciate the relevance of budget restrictions in the decision-making process of consumers.