An individual's demand curve for X
A) shows how the utility-maximizing choice of X changes as the price of X changes.
B) shows how the individual's preferences change as the price of X changes.
C) shows how the individual's preferences change as the consumer income changes.
D) both a and b
E) both a and c

Question

Quizplus · Accepted Answer

An individual's demand curve for X shows the quantity of X that the individual is willing and able to buy at different prices of X, assuming that all other factors affecting the individual's demand remain constant. Therefore, it represents the utility-maximizing choice of X at different prices. Option B is incorrect because the demand curve does not show how preferences change with the price of X but instead shows the quantity of X demanded at different prices, assuming preferences remain constant. Option C is incorrect because the income effect is not depicted by an individual's demand curve for X.

An Individual's Demand Curve for X