Figure: Indifference Curves and Consumption Bundles (Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles.In the figure, the lines AA and BC are parallel.The optimal consumption point could shift from b to c as a result of any of the following except:
A)an equal percentage increase in the prices of both hot dogs and pizza while income is unchanged.
B)a decrease in income with prices constant.
C)a change in tastes.
D)an equal percentage increase in the prices of both hot dogs and pizza while income is unchanged or as a result of a decrease in income with prices constant.

Question

Figure: Indifference Curves and Consumption Bundles   (Figure: Indifference Curves and Consumption Bundles) Look at the figure Indifference Curves and Consumption Bundles.In the figure, the lines AA and BC are parallel.The optimal consumption point could shift from b to c as a result of any of the following except:
A)an equal percentage increase in the prices of both hot dogs and pizza while income is unchanged. 
B)a decrease in income with prices constant. 
C)a change in tastes. 
D)an equal percentage increase in the prices of both hot dogs and pizza while income is unchanged or as a result of a decrease in income with prices constant.

Quizplus · Accepted Answer

The optimal consumption point can shift as a result of changes in prices and income, but not due to changes in tastes. Therefore, any of the listed options except for C could result in a shift from b to c.