Figure 21-17 -Refer to Figure 21-17.It would be possible for the consumer to reach I₂ if A) the price of Y decreases. B) the price of X decreases. C) income increases. D) All of the above would be correct.

Question

Quizplus · Accepted Answer

Option A: If the price of Y decreases, the budget constraint will shift outwards, allowing the consumer to purchase more of both X and Y. This would lead to a higher quantity demanded of both X and Y and the new equilibrium point could be at I₂. Option B: If the price of X decreases, the budget constraint will again shift outwards, allowing the consumer to purchase more of both X and Y. This would lead to a higher quantity demanded of both X and Y and the new equilibrium point could be at I₂. Option C: If income increases, the budget constraint will shift outwards, allowing the consumer to purchase more of both X and Y. This would lead to a higher quantity demanded of both X and Y and the new equilibrium point could be at I₂. Therefore, all the options could result in the consumer reaching I₂.

Figure 21-17 -Refer to Figure 21-17.It Would Be Possible for the Consumer