The following diagram shows Ken's demand curve for neckties. When the price of neckties is $5, Ken purchases four neckties. When the price of neckties falls to $4, he purchases five neckties. A decline in the price of neckties causes his expenditure to:
Figure 6.3

A)increase from $20 to $25, increasing his consumer surplus.
B)increase from $20 to $25, decreasing his consumer surplus.
C)remain constant at $20, leaving his consumer surplus unchanged.
D)remain constant at $20, increasing his consumer surplus.
E)decrease from $20 to $15, increasing his consumer surplus.

Question

The following diagram shows Ken's demand curve for neckties. When the price of neckties is $5, Ken purchases four neckties. When the price of neckties falls to $4, he purchases five neckties. A decline in the price of neckties causes his expenditure to: ​
Figure 6.3​
​

A)increase from $20 to $25, increasing his consumer surplus. 
B)increase from $20 to $25, decreasing his consumer surplus. 
C)remain constant at $20, leaving his consumer surplus unchanged. 
D)remain constant at $20, increasing his consumer surplus. 
E)decrease from $20 to $15, increasing his consumer surplus.

Quizplus · Accepted Answer

The Answer of The following diagram shows Ken's demand curve for neckties. When the price of neckties is $5, Ken purchases four neckties. When the price of neckties falls to $4, he purchases five neckties. A decline in the price of neckties causes his expenditure to: ​
Figure 6.3​
​

A)increase from $20 to $25, increasing his consumer surplus. 
B)increase from $20 to $25, decreasing his consumer surplus. 
C)remain constant at $20, leaving his consumer surplus unchanged. 
D)remain constant at $20, increasing his consumer surplus. 
E)decrease from $20 to $15, increasing his consumer surplus.

The Following Diagram Shows Ken's Demand Curve for Neckties