-In the above figure, if income is $8, the initial price of a soft drink is $1, and the initial price of a milkshake is $2, a decrease in the price of a milkshake to $1 will move the consumer from point _______ to point _______.
A) a; b
B) a; d
C) a; c
D) b; c

Question

-In the above figure, if income is $8, the initial price of a soft drink is $1, and the initial price of a milkshake is $2, a decrease in the price of a milkshake to $1 will move the consumer from point _______ to point _______.
A) a; b 
B) a; d 
C) a; c 
D) b; c

Quizplus · Accepted Answer

The decrease in the price of a milkshake makes it relatively cheaper than a soft drink, so the consumer will substitute milkshakes for soft drinks. This will move the consumer from point a (where they were consuming 4 soft drinks and 2 milkshakes) to point c (where they are consuming 2 soft drinks and 4 milkshakes).

-In the Above Figure, If Income Is $8, the Initial