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-(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility:
A)can be increased by consuming more nights in a hotel room and fewer train tickets.
B)can be increased by consuming fewer nights in a hotel room and more train tickets.
C)can be increased by consuming more of both goods.
D)cannot be increased.

Question

Use the following to answer question: 
-(Figure: Consumer Equilibrium IV)Use Figure Consumer Equilibrium IV.Assume that you are consuming the combination of goods at point K.Given the budget constraint FL,utility:
A)can be increased by consuming more nights in a hotel room and fewer train tickets. 
B)can be increased by consuming fewer nights in a hotel room and more train tickets. 
C)can be increased by consuming more of both goods. 
D)cannot be increased.

Quizplus · Accepted Answer

Given the budget constraint FL and the initial consumption at point K, moving towards a point on the budget line closer to the indifference curve's tangency point (such as moving from K towards the point where the budget line FL is tangent to an indifference curve) would increase utility. This implies consuming more nights in a hotel room and fewer train tickets to reach a higher indifference curve, thus increasing utility.

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