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 I.Given the budget constraint FL,utility:
A)cannot be increased.
B)can be increased by consuming more nights in a hotel room and fewer train tickets.
C)can be increased by consuming fewer nights in a hotel room and more train tickets.
D)can be increased by consuming more of both goods.

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 I.Given the budget constraint FL,utility:
A)cannot be increased. 
B)can be increased by consuming more nights in a hotel room and fewer train tickets. 
C)can be increased by consuming fewer nights in a hotel room and more train tickets. 
D)can be increased by consuming more of both goods.

Quizplus · Accepted Answer

At point I, the consumer is not on the highest attainable indifference curve. By consuming more nights in a hotel room and fewer train tickets, the consumer can move to a higher indifference curve and increase utility.

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