Figure 21-11
-Refer to Figure 21-11.Assume that the consumer depicted in the figure has an income of $100 and currently optimizes at bundle A.When the price of marshmallows decreases to $5,which bundle will the optimizing consumer choose?

Question

Figure 21-11 
-Refer to Figure 21-11.Assume that the consumer depicted in the figure has an income of $100 and currently optimizes at bundle A.When the price of marshmallows decreases to $5,which bundle will the optimizing consumer choose?

Quizplus · Accepted Answer

When the price of marshmallows decreases, the budget line will shift outward, allowing the consumer to purchase more marshmallows. As a result, the consumer will choose a bundle that includes more marshmallows, such as bundle B.

Figure 21-11 -Refer to Figure 21-11.Assume That the Consumer Depicted in the Depicted