37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.
37) The above figure shows Bobby's indifference map for soda and juice. B₁ indicates his original budget line. B₂ indicates his budget line resulting from an increase in the price of soda. From the graph, one can conclude that A) the income elasticity of demand for soda is 1. B) Bobby's demand for soda is perfectly inelastic. C) Bobby views soda as a normal good. D) Bobby views soda as an inferior good.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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