Question

If the price of a good increases, ________. 1, the consumer surplus increases 2, the budget constraint shifts to the left 3, the consumer surplus decreases 4, the budget constraint shifts to the right

Answer 1

3, the consumer surplus decreases

Step-by-step explanation:

Consumer surplus is the difference between the willingness to pay of a consumer and the price of the good.

For example if the willingness to pay for a good is $60. If the price of the good rise from $30 to $40. The consumer surplus would fall from $30 to $20.

Budget constraint is the amount of goods and services a consumer can purchase given the consumers income and the price of goods.

Only increase or decrease in income leads to a shift of the budget constraint.

I hope my answer helps you