6A-5 Income and Substitution Effects FIGURE 6-11 -Refer to Figure 6-11.The line joining points E₁ and E₃is known as ________,which shows how ________. A)a price consumption line; consumption changes as one price changes,with money income held constant B)an income consumption line; consumption changes as income changes,with relative prices held constant C)a price consumption line; consumption changes as money income and relative prices change D)an income consumption line; consumption changes with changing relative prices and constant income

Question

Quizplus · Accepted Answer

The line joining points E₁ and E₃ is called the price consumption line. It shows how consumption changes as the price of one product changes (in this case, from P11 to P13), with money income held constant. Therefore, the correct answer is A.