ratios should be equal:

6.2 How Changes in Income and Prices Affect Consumption Choices

The budget constraint framework suggest that when income or price changes, a range of responses are

possible. When income rises, households will demand a higher quantity of normal goods, but a lower quantity

of inferior goods. When the price of a good rises, households will typically demand less of that good—but

whether they will demand a much lower quantity or only a slightly lower quantity will depend on personal

preferences. Also, a higher price for one good can lead to more or less demand of the other good.

6.3 Behavioral Economics: An Alternative Framework for Consumer Choice

People regularly make decisions that seem less than rational, decisions that contradict traditional consumer

theory. This is because traditional theory ignores people’s state of mind or feelings, which can influence
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