Use the following figure to answer the question : Figure 12-3 : shows the indifference curves U 1 and U 2 of a consumer choosing between hours devoted at a tennis club and other goods.All consumers in this market have identical demand curves.IZ is the original budget line of a representative consumer,which shifts to AB when the club begins to charge an entry fee.

-Refer to Figure 12-3.The price of a court hour to the consumer,in terms of other goods,is:
A)OI/OZ.
B)OI/BZ.
C)OI/OB.
D)AI/BZ.

Question

Use the following figure to answer the question : Figure 12-3 : shows the indifference curves U₁ and U₂ of a consumer choosing between hours devoted at a tennis club and other goods.All consumers in this market have identical demand curves.IZ is the original budget line of a representative consumer,which shifts to AB when the club begins to charge an entry fee.

Use the following figure to answer the question : Figure 12-3 : shows the indifference curves U<sub>1</sub> and U<sub>2</sub> of a consumer choosing between hours devoted at a tennis club and other goods.All consumers in this market have identical demand curves.IZ is the original budget line of a representative consumer,which shifts to AB when the club begins to charge an entry fee. -Refer to Figure 12-3.The price of a court hour to the consumer,in terms of other goods,is: A) OI/OZ. B) OI/BZ. C) OI/OB. D) AI/BZ.

-Refer to Figure 12-3.The price of a court hour to the consumer,in terms of other goods,is:

-Refer to Figure 12-3.The price of a court hour to the consumer,in terms of other goods,is:
A)OI/OZ. 
B)OI/BZ. 
C)OI/OB. 
D)AI/BZ.

Quizplus · Accepted Answer

The price of a court hour to the consumer, in terms of other goods, is represented by the opportunity cost of choosing a court hour over other goods. This is depicted by the slope of the budget constraint, which is OI/OZ.

Use the Following Figure to Answer the Question : Figure