12. If a consumer's income increases while the prices of all goods remain the same, what happens to the consumer's budget constraint? (a) The budget constraint shifts inward (in and to the left). (b) The budget constraint does not shift, but the slope increases (i.e. budget constraint becomes steeper). (c) The budget constraint shifts outward (up and to the right). (d) The budget constraint does not shift, but the slope decreases (i.e. budget constraint becomes less steep). 13. If a consumer is willing to pay $2.25 for their 3rd cup of Earl Grey tea from Starbucks, then which of the following is true? (a) The height of the demand curve tells us that the marginal rate of substitution is $2.25. (b) ghe height of the demand curve tells us that the marginal benefit of 3rd cup of tea is 2.25. (c) The height of the demand curve tells us that the marginal revenue is $2.25 for the 3rd cup of tea. (d) Both (a) and (b). (e) Both (a) and (c). 14. The substitution effect tells us that given a decrease in the price of the x-axis good (assume that the good is a normal good), the consumer will choose to (a) Consume less of the xaxis good which is now relatively more expensive than the yaxis good. (b) Consume less of the yaxis good because the consumer's purchasing power has decreased with respect to that good. (c) Consume more of the x-axis good which is now relatively less expensive than the yaxis good. (d) Both (b) and (c)