The figure shows two of Laura's indifference curves and three budget lines: B, when her income is $4 and the price of water is $1.00 a bottle, B₂ when her income is $2.75 and the price of water is $0.50 a bottle, B, when her income is $4 and the price of water is $0.50 a bottle. The price of a pack of mints is $0.50. If the price of a bottle of water falls from $1.00 to $0.50, the substitution effect is the in the quantity of water from 0000 A. decrease; 5 bottles to 3 bottles B. increase; 2 bottles to 3 bottles C. increase; 3 bottles to 5 bottles D. decrease; 3 bottles to 2 bottles 4 3.0 2.5 Mints (packs per day) B₁ B₂ k 25
The figure shows two of Laura's indifference curves and three budget lines: B, when her income is $4 and the price of water is $1.00 a bottle, B₂ when her income is $2.75 and the price of water is $0.50 a bottle, B, when her income is $4 and the price of water is $0.50 a bottle. The price of a pack of mints is $0.50. If the price of a bottle of water falls from $1.00 to $0.50, the substitution effect is the in the quantity of water from 0000 A. decrease; 5 bottles to 3 bottles B. increase; 2 bottles to 3 bottles C. increase; 3 bottles to 5 bottles D. decrease; 3 bottles to 2 bottles 4 3.0 2.5 Mints (packs per day) B₁ B₂ k 25
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![The figure shows two of Laura's indifference curves and three budget lines:
B, when her income is $4 and the price of water is $1.00 a bottle,
B₂ when her income is $2.75 and the price of water is $0.50 a bottle,
B3 when her income is $4 and the price of water is $0.50 a bottle.
The price of a pack of mints is $0.50.
If the price of a bottle of water falls from $1.00 to $0.50, the substitution
effect is the in the quantity of water from
A. decrease; 5 bottles to 3 bottles
B. increase; 2 bottles to 3 bottles
C. increase; 3 bottles to 5 bottles
D. decrease; 3 bottles to 2 bottles
3.0
2.5
Mints (packs per day)
B₁
B2
h
Q
12
B3](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F02b10e3d-85d7-4d74-9475-c9bb47e51200%2F73a6d102-70fb-4972-8585-fc788ca3a20e%2F8kw2ae_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The figure shows two of Laura's indifference curves and three budget lines:
B, when her income is $4 and the price of water is $1.00 a bottle,
B₂ when her income is $2.75 and the price of water is $0.50 a bottle,
B3 when her income is $4 and the price of water is $0.50 a bottle.
The price of a pack of mints is $0.50.
If the price of a bottle of water falls from $1.00 to $0.50, the substitution
effect is the in the quantity of water from
A. decrease; 5 bottles to 3 bottles
B. increase; 2 bottles to 3 bottles
C. increase; 3 bottles to 5 bottles
D. decrease; 3 bottles to 2 bottles
3.0
2.5
Mints (packs per day)
B₁
B2
h
Q
12
B3
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