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Refer to Figure 4 x\mathrm{x} And y\mathrm{y} Both Have More of Good I\mathrm{I}

Question 25

Multiple Choice

Refer to Figure 4.3. Bundle x\mathrm{x} and y\mathrm{y} both have more of good I\mathrm{I} than reference points r\mathrm{r} and s. The curve vsv_{s} traces out the difference curve when using reference point s. Let Δ1\Delta_{1} be the amount of good j\mathrm{j} the individual must be given in order to be indifferent between bundle y\mathrm{y} and bundle x\mathrm{x} under reference point s\mathrm{s} . Let Δ2\Delta_{2} be the amount of good j\mathrm{j} the individual must be given to give up the SAME amount of good i under reference point rr . Which of the following is true?


A) Δ1Δ2\Delta_{1} \leq \Delta_{2}
B) Δ1=Δ2\Delta_{1}=\Delta_{2}
C) Δ1<Δ2\Delta_{1}<\Delta_{2}
D) Δ1>Δ2\Delta_{1}>\Delta_{2}

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