Graph 22-9
-Refer to Graph 22-9.Assume that the consumer depicted in the graph has an income of $50 and currently optimises at point B.When the price of chocolate chips decreases to $2.50, the optimising consumer will choose to purchase how many units of marshmallows?
A)four
B)five
C)10
D)15

Question

Graph 22-9 
-Refer to Graph 22-9.Assume that the consumer depicted in the graph has an income of $50 and currently optimises at point B.When the price of chocolate chips decreases to $2.50, the optimising consumer will choose to purchase how many units of marshmallows?
A)four 
B)five 
C)10 
D)15

Quizplus · Accepted Answer

When the price of chocolate chips decreases, the consumer can afford to buy more of both goods if they wish, due to the substitution and income effects. The movement from point B to a new optimal point, assuming it involves purchasing more chocolate chips due to their lower price, would also allow for the reallocation of budget towards marshmallows if desired. Without the specific graph, we can infer that the optimal choice involves adjusting purchases to maintain utility maximization. Given the choices, if the consumer optimizes their consumption, they might end up buying more or the same amount of marshmallows as before, depending on their preferences and the relative prices. The correct answer is inferred based on typical consumer behavior in response to a price decrease in a complementary or unrelated good, leading to an increase in overall purchasing power.

Graph 22-9 -Refer to Graph 22-9.Assume That the Consumer Depicted in the Depicted