Refer to the Diagram

question 148

Multiple Choice

Refer to the diagram. The equilibrium points shown in the diagram, along with the price change that produced the shift of the budget line from ab to ac,

• A)are consistent with a downsloping demand curve for product K.
• B)imply that the consumer's money income has declined, but his or her real income has increased.
• C)imply consumer irrationality since the dearer product is being substituted for the cheaper product.
• D)suggest that K is an inferior good.

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Definitions:

Fresh Fruit

Pertains to fruits that are in their natural state, not processed or preserved, and are consumed for their nutritional value and taste.

Gasoline

A volatile, flammable liquid derived from petroleum, primarily used as fuel in internal combustion engines.

Electricity

A form of energy resulting from the existence of charged particles, used for power and a variety of applications in the modern world.

Medical Services

Healthcare and treatment provided by trained medical professionals to diagnose, treat, and prevent illness or injury.