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-The Above Figure Shows Jane's Budget Line and Two of Her

Question 348

Multiple Choice

-The above figure shows Jane's budget line and two of her indifference curves. If the price of a lobster dinner falls so that Jane can now purchase the combination represented by Point B, Jane would experience A) an increase in the opportunity cost of a lobster dinner. B) no change in her marginal rate of substitution. C) an income and a substitution effect. D) Both answers B and C are correct.
-The above figure shows Jane's budget line and two of her indifference curves. If the price of a lobster dinner falls so that Jane can now purchase the combination represented by Point B, Jane would experience


A) an increase in the opportunity cost of a lobster dinner.
B) no change in her marginal rate of substitution.
C) an income and a substitution effect.
D) Both answers B and C are correct.

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