Referring to the graph below (Figure 3) showing a consumer's initial budget line (labeled BO) and new budget line (labeled B1) for two goods, X and Y, and two different indifference curves (IC1-IC2). IC2 IC1 B0 81 Figure 3 Consider the shift in the budget line from B0 to B1. Which of the statements cannot explain the observed shift in the budget line? O a. The consumer's income doubled and the prices of both X and Y tripled. O b. The consumer's income increased and prices remained constant. The consumer's income decreased and prices remained constant. О с. O d. The consumer's income is unchanged and the prices of both X and Y increased. The consumer's income decreased by 25% and the prices of both X and Y decreased O e. by 5%.
Referring to the graph below (Figure 3) showing a consumer's initial budget line (labeled BO) and new budget line (labeled B1) for two goods, X and Y, and two different indifference curves (IC1-IC2). IC2 IC1 B0 81 Figure 3 Consider the shift in the budget line from B0 to B1. Which of the statements cannot explain the observed shift in the budget line? O a. The consumer's income doubled and the prices of both X and Y tripled. O b. The consumer's income increased and prices remained constant. The consumer's income decreased and prices remained constant. О с. O d. The consumer's income is unchanged and the prices of both X and Y increased. The consumer's income decreased by 25% and the prices of both X and Y decreased O e. by 5%.
Micro Economics For Today
10th Edition
ISBN:9781337613064
Author:Tucker, Irvin B.
Publisher:Tucker, Irvin B.
Chapter6: Consumer Choice Theory
Section6.A: Indifference Curve Analysis
Problem 3SQP
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Transcribed Image Text:Referring to the graph below (Figure 3) showing a consumer's initial budget line (labeled BO)
and new budget line (labeled B1) for two goods, X and Y, and two different indifference
curves (IC1-IC2).
IC2
IC1
B0
81
Figure 3
Consider the shift in the budget line from B0 to B1. Which of the statements cannot explain
the observed shift in the budget line?
O a.
The consumer's income doubled and the prices of both X and Y tripled.
O b. The consumer's income increased and prices remained constant.
The consumer's income decreased and prices remained constant.
O C.
O d. The consumer's income is unchanged and the prices of both X and Y increased.
The consumer's income decreased by 25% and the prices of both X and Y decreased
O e.
by 5%.
Transcribed Image Text:Y
a
C
d
b
IC2
IC1
B0
B1
X
Figure 3
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