FIGURE 6-9
-Refer to Figure 6-9.In part (ii),the consumer's move from point Z to point Y is caused by
A)a change in the consumer's preferences towards milk.
B)an increase in the price of milk.
C)an increase in the price of bread.
D)a decrease in the price of bread.
E)a decrease in money income.

Question

FIGURE 6-9
-Refer to Figure 6-9.In part (ii),the consumer's move from point Z to point Y is caused by
A)a change in the consumer's preferences towards milk. 
B)an increase in the price of milk. 
C)an increase in the price of bread. 
D)a decrease in the price of bread. 
E)a decrease in money income.

Quizplus · Accepted Answer

The movement from point Z to point Y occurs because there is an increase in the price of bread. This causes the budget constraint to shift inward, reducing the consumer's purchasing power and leading to a decrease in the amount of both goods that the consumer can afford. The new optimal point Y is on a lower indifference curve and reflects the fact that the consumer is consuming less of both goods due to the increase in the price of bread. Therefore, option C is the correct answer.

FIGURE 6-9 -Refer to Figure 6-9.In Part (Ii),the Consumer's Move from Point