Figure 10-6

The above panels show various combinations of indifference curves and budget constraints for two products: Popcorn and Candy.
-Refer to Figure 10-6.Which diagram demonstrates an increase in total utility following a decrease in the price of popcorn?
A)the movement from d to e in Panel A
B)the movement from f to g in Panel B
C)the movement from h to k in Panel C
D)none of the above

Question

Figure 10-6
  
The above panels show various combinations of indifference curves and budget constraints for two products: Popcorn and Candy.
-Refer to Figure 10-6.Which diagram demonstrates an increase in total utility following a decrease in the price of popcorn?
A)the movement from d to e in Panel A 
B)the movement from f to g in Panel B 
C)the movement from h to k in Panel C 
D)none of the above

Quizplus · Accepted Answer

A decrease in the price of popcorn would increase the quantity consumed, leading to an increase in total utility, which is shown by the movement from d to e in Panel A.

Figure 10-6 the Above Panels Show Various Combinations of Indifference Curves and Combinations