Given the budget lines and indifference curves shown in Exhibit 6A-7, if the budget line shifts, then the equilibrium points X and Y:
A) are equal in total utility.
B) result from a decrease in the consumer's budget.
C) result from a decrease in the price of good Y.
D) are two points along a downward sloping demand curve for good X.

Question

Quizplus · Accepted Answer

When the budget line shifts, it indicates a change in the consumer's purchasing power or prices. If equilibrium points X and Y are on different budget lines, they represent different quantities of good X at different prices, illustrating a movement along the demand curve for good X.

Given the Budget Lines and Indifference Curves Shown in Exhibit