Refer to the Graphs Shown, Which Show Indifference Curve Analysis

question 132

Multiple Choice

Refer to the graphs shown, which show indifference curve analysis with the associated demand curves. The best explanation for a movement from point D to point E is:

• A) an outward rotation of the budget constraint along the x-axis, allowing the consumer to move from point A to point B.
• B) a parallel shift of the budget constraint, allowing the consumer to move from point A to point C.
• C) an inward rotation of the budget constraint along the x-axis, forcing the consumer to move from point B to point A.
• D) an inward rotation of the budget constraint along the y-axis, forcing the consumer to move from point C to point B.