Figure 21-5
(a) (b)
-Refer to Figure 21-5. In graph (a), if income is equal to $200, then the price of good X is
A) $12.
B) $16.
C) $20.
D) $24.

Question

Figure 21-5
(a) (b)  
-Refer to Figure 21-5. In graph (a), if income is equal to $200, then the price of good X is
A) $12. 
B) $16. 
C) $20. 
D) $24.

Quizplus · Accepted Answer

At an income of $200, the budget line is tangent to the highest indifference curve, which occurs at point F, where the consumer maximizes satisfaction for the given income and prices. The price of X at this point is $20.