Figure 3-1 shows the preferences of a consumer toward reading books and watching movies.
In Figure 3-1,the highest indifference curve is unattainable.Which of the following events would allow the consumer to reach the highest indifference curve,other things unchanged?
A)An increase in the price of books
B)A reduction in the price of movie tickets
C)A decrease in the income of the consumer
D)An increase in the price of movie tickets and books

Question

Figure 3-1 shows the preferences of a consumer toward reading books and watching movies.
In Figure 3-1,the highest indifference curve is unattainable.Which of the following events would allow the consumer to reach the highest indifference curve,other things unchanged? 
A)An increase in the price of books 
B)A reduction in the price of movie tickets 
C)A decrease in the income of the consumer 
D)An increase in the price of movie tickets and books

Quizplus · Accepted Answer

The highest indifference curve represents the consumer's most preferred combination of books and movies, which is currently unattainable. This means that the consumer would need to increase their consumption of either books or movies (or both) to reach this point. An increase in the price of books (A) or an increase in the price of both books and movies (D) would make it even harder for the consumer to reach this point, as they would have to give up more of their budget to purchase these goods. A decrease in the consumer's income (C) would also make it difficult for them to reach the highest indifference curve, as they would have less money to spend on books and movies. However, a reduction in the price of movie tickets (B) would make movies relatively cheaper compared to books, and could encourage the consumer to increase their consumption of movies. This would allow them to move closer to the highest indifference curve, making Choice B the best option.

Figure 3-1 Shows the Preferences of a Consumer Toward Reading