-Refer to Figure 5.5.Which diagram shows the price-consumption curve resulting from a decrease in the price of good X?
A) A
B) B
C) C
D) D

Question

-Refer to Figure 5.5.Which diagram shows the price-consumption curve resulting from a decrease in the price of good X?
A) A 
B) B 
C) C 
D) D

Quizplus · Accepted Answer

The price-consumption curve in diagram B correctly shows the effect of a decrease in the price of good X. As the price of good X decreases, the consumer can afford to buy more of good X for the same level of income, leading to a movement along the curve that reflects increased consumption of good X while adjusting the consumption of other goods to maintain utility. This is depicted in diagram B by the downward sloping curve, indicating that as the price of good X decreases (moving from left to right along the curve), the quantity of good X consumed increases.