Figure 7-2
Figure 7-2 represents the demand for ice cream cones.
-Refer to Figure 7-2.When the price of ice cream cones increases from $2 to $3,quantity demanded decreases from 4 ice cream cones to 3 ice cream cones.This change in quantity demanded is due to
A) the price and output effects.
B) the income and substitution effects.
C) the law of diminishing marginal utility.
D) the fact that marginal willingness to pay falls.

Question

Figure 7-2
  Figure 7-2 represents the demand for ice cream cones.
-Refer to Figure 7-2.When the price of ice cream cones increases from $2 to $3,quantity demanded decreases from 4 ice cream cones to 3 ice cream cones.This change in quantity demanded is due to
A) the price and output effects. 
B) the income and substitution effects. 
C) the law of diminishing marginal utility. 
D) the fact that marginal willingness to pay falls.

Quizplus · Accepted Answer

The change in quantity demanded is due to the income and substitution effects, which explain how consumers adjust their consumption when the price of a good changes.

Figure 7-2 Figure 7-2 Represents the Demand for Ice Cream