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%.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 5CQQ

See similar textbooks

Similar questions

Take Jeremys total utility information in Exercise 6.1, and use the marginal utility approach to confirm the choice of phone minutes and round trips that maximize Jeremys utility.
Is it possible for total utility to increase while marginal utility diminishes? Explain.
If people do not have a complete mental picture of total utility for every level of consumption, how can they find their utility-maximizing consumption choice?
Would you expect total utility to rise or fall with additional consumption of a good? Why?
Help me with this one
A consumer’s preferences between goods x and y are representedby the utility function u(x, y) = 2min{x, y}+10. Suppose this consumer hasincome of $16, the price of good x is $3 and the price of good y is $1. Suppose the price of good x increases to $7 while the price of good y andthe consumer’s income stay constant. Calculate the magnitudes of the compensating and the equivalent variations. Explain what each measures.
A consumer is making purchases of products Alpha and Beta such that the marginal utility of product Alpha is 63 and the marginal utility of product Beta is 40. The price of product Alpha is $9, and the price of product Beta is $5. The utility-maximizing rule suggests that, to stay within a given budget constraint, this consumer should Multiple Choice O O O increase consumption of product Beta and increase consumption of product Alpha. make no change in the consumption of Alpha or Beta. increase consumption of product Beta and decrease consumption of product Alpha. increase consumption of product Alpha and decrease consumption of product Beta.
i need the answer quickly
Question 29 When considering her budget, the highest indifference curve that a consumer can reach is the None of the above is correct O indifference curve that intersects the budget constraint in at least two places O one that is tangent to the budget constraint O indifference curve farthest from the origin
Only typed answer
I am unsure the direction the utility functions would go in , with this specific scenario
Evelyn loves to eat chocolate. However, every piece of chocolate that Evelyn eats provides her with less total utility. What can we conclude about Evelyn's utility from this information? O Her marginal utility is negative. Her marginal utility is constant. O Her marginal utility is diminishing. Her marginal utility is increasing.