Question

Helena is given a voucher that can be spent only on educational expenses. She has a budget constraint with educational expenses on the horizontal axis and everything else on the vertical axis. Suppose everything else is comprised only of normal goods. Then:_______. A. The voucher will result in Helena increasing her spending on educational expenses by more than the amount of the voucher. B. Helena will most likely end up spending less money on everything else after receiving the voucher. C. Helena will not buy any educational expenses because she can use the voucher for all other goods. D. Helena will most likely end up spending some more money on everything else after receiving the voucher.

Answer 1

Answer: Helena will most likely end up spending some more money on everything else after receiving the voucher.

Explanation:

The budget constraint is used to shows the combinations of two goods which can be afforded by a consumer. A normal good is a good or product that when the income of the person rises,the demand for the product will also increase.

Based on the above information on the question, the correct answer is "Helena will most likely end up spending some more money on everything else after receiving the voucher".

This is because the voucher she was given can be spent only on educational expenses and her budget constraints comprises of educational expenses and everything else which is made up of normal goods. This means she'll still needs to get the normal goods later.