FIGURE 6- 8
-Refer to Figure 6- 8. In part (i), the line joining points A, B, and C is known as , which shows how .
A) a price- consumption line; consumption changes as money income and relative prices change
B) an indifference map; the value of various combinations of two goods changes.
C) an income- consumption line; consumption changes as income changes, with relative prices held constant
D) a price- consumption line; consumption changes as relative prices change, with money income constant
E) an income- consumption line; consumption changes with changing relative prices and constant income

Question

FIGURE 6- 8
-Refer to Figure 6- 8. In part (i), the line joining points A, B, and C is known as , which shows how .
A) a price- consumption line; consumption changes as money income and relative prices change 
B) an indifference map; the value of various combinations of two goods changes. 
C) an income- consumption line; consumption changes as income changes, with relative prices held constant 
D) a price- consumption line; consumption changes as relative prices change, with money income constant 
E) an income- consumption line; consumption changes with changing relative prices and constant income

Quizplus · Accepted Answer

The line joining points A, B, and C is an income-consumption line. It shows how consumption changes with changes in income, with relative prices held constant.

FIGURE 6- 8 -Refer to Figure 6- 8. in Part (I), the Line