Exhibit 5A-1 -Refer to Exhibit 5A-1. Which of the following statements is false? A)At point C, MU_X/MU_Y P_X/P_Y. B)Curve I₂ represents a greater level of utility than I₁. C)If the individual started at point A and moved to point B, the most likely cause was a decrease in the price of X. D)In moving from point A to point B, the individual is moving down along his or her demand curve for good Y. E)At point B, MU_X/P_X = MU_Y/P_Y.

Question

Exhibit 5A-1 -Refer to Exhibit 5A-1. Which of the following statements is false? A)At point C, MU_X/MU_Y > P_X/P_Y. B)Curve I₂ represents a greater level of utility than I₁. C)If the individual started at point A and moved to point B, the most likely cause was a decrease in the price of X. D)In moving from point A to point B, the individual is moving down along his or her demand curve for good Y. E)At point B, MU_X/P_X = MU_Y/P_Y.

Quizplus · Accepted Answer

Moving from point A to point B involves a decrease in quantity demanded of good Y, which means the individual is moving up along the demand curve for good Y, not down as stated in option D.

Exhibit 5A-1 -Refer to Exhibit 5A-1. Which of the Following Statements Is