Use the Following to Answer Questions

question 179

Multiple Choice

Use the following to answer questions:
Figure: The Optimal Consumption Bundle
-(Figure: The Optimal Consumption Bundle) Look at the figure The Optimal Consumption Bundle. Which of the following could lead to an optimal consumption bundle on indifference curve I₃?

• A) an increase in income
• B) an increase in the price of restaurant meals
• C) an increase in the price of rooms
• D) a decrease in income

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Definitions:

Government Action

Any activity or policy implemented by a government to influence economic, social, or political issues.

Devalued

Devalued is a term used to describe a reduction in the value of a currency with respect to other currencies, often through government policy.

Exports

Goods or services produced in one country and sold to buyers in another country.

Imports

Imports refer to the goods and services that are brought into a country from abroad for sale.