Figure 21-3

-Refer to Figure 21-3.Assume that a consumer faces both budget constraints in graph (a)and graph (b)on two different occasions.If her income has remained constant,what has happened to prices?
A)The price of X in graph (a) is higher than the price of X in graph (b).
B)The price of Y in graph (a) is higher than the price of Y in graph (b).
C)The prices of both X and Y are lower in graph (a).
D)None of the above are true.

Question

Figure 21-3
 
-Refer to Figure 21-3.Assume that a consumer faces both budget constraints in graph (a)and graph (b)on two different occasions.If her income has remained constant,what has happened to prices?
A)The price of X in graph (a) is higher than the price of X in graph (b). 
B)The price of Y in graph (a) is higher than the price of Y in graph (b). 
C)The prices of both X and Y are lower in graph (a). 
D)None of the above are true.

Quizplus · Accepted Answer

If the consumer's income is constant and the budget constraint shifts, it indicates a change in prices. A shift outward for X in graph (b) compared to graph (a) suggests the price of X has decreased in graph (b).

Figure 21-3 -Refer to Figure 21-3.Assume That a Consumer Faces Both Budget