Moving Down Along an Indifference Curve

question 217

Multiple Choice

Moving down along an indifference curve,

• A) the price of the good measured on the vertical axis decreases.
• B) total utility decreases.
• C) the marginal rate of substitution for the good on the horizontal axis decreases.
• D) the slope of the budget line decreases.
• E) the consumer increasingly prefers the new consumption points to the old consumption points.

---

Definitions:

Surtax

An additional tax levied on top of the base tax rate for specific purposes or income brackets.

MAGI

Modified Adjusted Gross Income is a measure used by the IRS to determine eligibility for certain tax benefits, adjusting the gross income by adding back certain deductions.

Short-term Gain

Profit realized from the sale of assets held for a year or less, subject to taxes at ordinary income rates in many jurisdictions.

Long-term Gain

The profit from the sale of an asset held for more than a year, subject to lower capital gains tax rates.