The Following Figure Shows a Portion of a Consumer's Indifference

question 37

Multiple Choice

The following figure shows a portion of a consumer's indifference map and budget lines.The price of good Y is $17 and the consumer's income is $7,650.Let the consumer begin in utility-maximizing equilibrium at point A on indifference curve II.Next the price of good X changes so that the consumer moves to a new utility-maximizing equilibrium at point B on indifference curve I.The income effect of the change in the price of X is

• A)50
• B)100
• C)150
• D)-100
• E)-150

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Definitions:

Shares

Units of ownership interest in a corporation or financial asset that provide a share in the corporation's profits and a claim on its assets.

Paid-In Capital

The total amount of money raised by a company through the sale of shares to the shareholders, including additional amounts over the nominal value.

Issue Price

The price at which new securities are sold to the public or investors by the issuer when they are first offered.

Par

The face value of a security as stated by its issuer, distinct from its market value.