If Indifference Curves and Budget Lines Are Used to Analyze

question 142

Multiple Choice

If indifference curves and budget lines are used to analyze consumer choice, an inferior good will

• A)escape detection when income rises.
• B)be easily identified because the quantity purchased will fall as income rises.
• C)be easily identified because the quantity purchased will rise as income rises.
• D)be easily identified because it will change the slope of the budget line.
• E)escape detection because this model does not show that relationship.

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Definitions:

Utility Function

Describes the relationship between the consumption of goods and the resulting level of satisfaction or utility for an individual.

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