Option 1 -> This occurs when income decreases, reducing purchasing power.
Option 2 -> This occurs when income increases while prices remain constant, expanding purchasing power equally for both goods.
Option 3 -> This occurs when the price of one good changes, altering the slope of the budget line.
Option 4 -> This would occur with simultaneous changes in income and prices at different rates.
Hence, Parallel outwards shift in budget line -> When consumer income increases while prices of both goods remain unchanged, the budget line shifts parallel outward. This is because both intercepts (M/Px and M/Py) increase proportionally, maintaining the same slope (-Px/Py). The consumer can now afford more of both goods, but the trade-off ratio between goods remains constant since relative prices haven't changed. -> correct