Source: EconLog
by Bryan Cutsinger
“‘Consider a consumer who uses her money income to purchase only two goods: X and Y. Suppose the prices of these goods double as does this consumer’s money income. Evaluate: There will be no change in the quantities of X and Y she purchases.’ This question is one I like to ask my students when I introduce the notion of a budget constraint. As I’ll explain shortly, it highlights an important point in consumer theory–namely, that what influences consumer behavior is their real (i.e., inflation-adjusted) wages and the real prices of the goods they consume.” (12/11/24)
https://www.econlib.org/consumer-purchasing-cutsingers-solution/