Figure 5-1 shows the preferences of a consumer for food and other goods.He is initially in equilibrium at point A where the budget line MN is tangent to the indifference curve.
Figure 5-1
-In Figure 5-1,the total outlays on other goods under a lump-sum grant equal in cost to the excise subsidy is given by _____.
A)0M
B)0K
C)0E

Question

Figure 5-1 shows the preferences of a consumer for food and other goods.He is initially in equilibrium at point A where the budget line MN is tangent to the indifference curve.
Figure 5-1 
-In Figure 5-1,the total outlays on other goods under a lump-sum grant equal in cost to the excise subsidy is given by _____.
A)0M 
B)0K 
C)0E

Quizplus · Accepted Answer

The Answer is B

Figure 5-1 Shows the Preferences of a Consumer for Food