Figure 5-1 Shows the Preferences of a Consumer for Food

question 2

Multiple Choice

Figure 5-1 shows the preferences of a consumer for food and other goods.He is initially in equilibrium at point A where the budget line MN is tangent to the indifference curve.
Figure 5-1
-In Figure 5-1,the total outlays on other goods under a lump-sum grant equal in cost to the excise subsidy is given by _____.

• A)0M
• B)0K
• C)0E

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