Editing Utility maximization problem (section)

== Reaction to changes in income ==
[[File:Optimal_bundle_reaction_to_changes_in_income.png|thumb|232x232px|Figure 5: This shows how the optimal bundle of a consumer changes when their income is increased.]]
If the consumers income is increased their budget line is shifted outwards and they now have more income to spend on either good x, good y, or both depending on their [[Preference (economics)|preferences]] for each good. if both goods x and y were [[normal good]]s then consumption of both goods would increase and the optimal bundle would move from A to C (see figure 5). If either x or y were [[inferior good]]s, then demand for these would decrease as income rises (the optimal bundle would be at point B or C).<ref>{{Cite web|last=Rice University|date=n.d.|title=How changes in income and prices affect consumption choices|url=https://opentextbc.ca/principlesofeconomics/chapter/6-2-how-changes-in-income-and-prices-affect-consumption-choices/|access-date=22 April 2021|website=Press books}}</ref>