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Figure: Indifference Curves and Consumption Bundles
-(Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles. The lines AA and BC are parallel. The optimal consumption point could shift from b to c as a result of any of the following EXCEPT:
A) an equal percentage increase in the prices of hot dogs and pizza while income is unchanged.
B) a decrease in income with prices constant.
C) a change in tastes.
D) an equal percentage increase in the prices of hot dogs and pizza while income is unchanged or a decrease in income with prices constant.

Question

Use the following to answer questions:
Figure: Indifference Curves and Consumption Bundles 
-(Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles. The lines AA and BC are parallel. The optimal consumption point could shift from b to c as a result of any of the following EXCEPT:
A) an equal percentage increase in the prices of hot dogs and pizza while income is unchanged. 
B) a decrease in income with prices constant. 
C) a change in tastes. 
D) an equal percentage increase in the prices of hot dogs and pizza while income is unchanged or a decrease in income with prices constant.

Quizplus · Accepted Answer

A change in tastes would not cause a parallel shift of the budget line, which is necessary for the optimal consumption point to move from b to c.

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