Given a consumer's indifference map,the demand curve for a good can
A)be derived by moving a consumer's budget constraint as her income rises.
B)be derived by moving a consumer's budget constraint as her income rises and she makes choices.
C)be derived by moving a consumer's budget constraint as the market price changes.
D)not be derived from consumer theory.

Question

Quizplus · Accepted Answer

The demand curve for a good can be derived by moving a consumer's budget constraint as the market price changes. The shape of the indifference map shows the consumer's preferences, but the budget constraint determines the feasible consumption choices. As the market price changes, the budget constraint will shift, leading to a different combination of goods that the consumer can afford. This will result in a different quantity demanded at different prices, which gives us the demand curve.

Given a Consumer's Indifference Map,the Demand Curve for a Good