Figure: The Optimal Consumption Bundle (Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle.In the figure, if the price of restaurant meals , then the optimal consumption bundle will be
On a indifference curve.
A)increases; higher
B)decreases; higher
C)decreases; lower
D)increases; similar

Question

Figure: The Optimal Consumption Bundle  (Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle.In the figure, if the price of restaurant meals , then the optimal consumption bundle will be
On a indifference curve.
A)increases; higher 
B)decreases; higher 
C)decreases; lower 
D)increases; similar

Quizplus · Accepted Answer

According to the figure, if the price of restaurant meals decreases, the budget constraint will shift outward (to the right) and the optimal consumption bundle will move to a higher indifference curve, indicating a higher level of utility. Therefore, the optimal consumption of restaurant meals will decrease but the overall utility level will increase.

Figure: the Optimal Consumption Bundle (Figure: the Optimal Consumption