Use the following to answer question:
-(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following is TRUE?
A)To increase utility beyond that received at point I requires an increase in the price of olive oil.
B)Point J could be attained with an increase in Ashyra's income.
C)An increase in the prices of olive oil and dish soap would allow Ashyra to attain point J.
D)To increase utility beyond that received at point I requires an increase in the price of dish soap.

Question

Use the following to answer question: 
-(Figure: Consumer Equilibrium II)Use Figure Consumer Equilibrium II.Which of the following is TRUE?
A)To increase utility beyond that received at point I requires an increase in the price of olive oil. 
B)Point J could be attained with an increase in Ashyra's income. 
C)An increase in the prices of olive oil and dish soap would allow Ashyra to attain point J. 
D)To increase utility beyond that received at point I requires an increase in the price of dish soap.

Quizplus · Accepted Answer

Point J represents a higher level of utility than point I, and it is located on a higher indifference curve. Since Ashyra is already consuming both goods, an increase in the price of either good would not lead to an increase in utility. However, if Ashyra's income were to increase, her budget constraint would shift outward, allowing her to consume more of both goods and potentially reach point J.

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