Bobby Moves Along an Indifference Curve for Shirts and Pants

question 28

Multiple Choice

Bobby moves along an indifference curve for shirts and pants by increasing consumption of shirts and decreasing consumption of pants. As Bobby has more and more pants, the number of shirts he is willing to trade for yet another pair of pants

• A) decreases.
• B) does not change.
• C) increases.
• D) initially decreases and then increases.

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Definitions:

Quantity Demanded

The total amount of a good or service that consumers are willing and able to buy at a specific price.

Market Equilibrium

A situation in a market where the quantity of a product demanded by consumers equals the quantity supplied by producers.

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, typically set below the equilibrium price.

Shortage

A situation in which the demand for a product or service exceeds the supply available at a particular price.