Final answer:
A lifetime budget constraint is downward sloping due to the income effect, where a rise in income causes the budget constraint to shift to the right. The consumption of goods may not rise equally when income increases, as it depends on individual preferences and prices.
Step-by-step explanation:
In economics, a lifetime budget constraint is downward sloping due to the income effect. A rise in income causes the budget constraint to shift to the right, while a reduction in income causes it to shift to the left. This is because as income increases, individuals can afford more goods and services, and vice versa.For example, if a person's income rises by 50%, their consumption of both books and doughnuts can increase. However, the quantity of one good may rise substantially while the quantity of the other good rises only a little or even declines. This depends on the individual's preferences and the prices of the goods.