The Figure Below Shows a Consumer Maximizing Utility at Two

question 78

Multiple Choice

The figure below shows a consumer maximizing utility at two different prices (the left panel) and the consumer's demand for good X at the same two prices of good X (the right panel) .The price of good Y is $4.50.When the price of X increases from point S to point R along the demand curve,$___________ of income must be temporarily given to the consumer to isolate the substitution effect.

• A)$175
• B)$180
• C)$200
• D)$360
• E)$400

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Definitions:

HMO

Health Maintenance Organization, a type of health insurance plan that limits coverage to care from doctors who work for or contract with the HMO.

Fee Schedule

A list of predetermined payment amounts for professional services provided to patients.

Payment Amounts

The sums of money paid or to be paid for goods, services, or obligations.