In the Indifference Curve/budget Line Diagram,consumers Reach Higher Indifference Curves

question 294

Multiple Choice

In the indifference curve/budget line diagram,consumers reach higher indifference curves when

• A) their budget decreases.
• B) the price of only the good measured along the y-axis increases.
• C) the price of only the good measured along the x-axis increases.
• D) the price of either good falls.
• E) the price of either good rises.

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Definitions:

Exponents

Mathematical notation indicating the number of times a number (the base) is multiplied by itself.

Production Function

A model in economics that links physical output of a production process to physical inputs or factors of production.

Returns To Scale

An economic concept describing how the output of a production process changes as the scale of inputs is increased, divided into increasing, constant, or decreasing returns to scale.

Marginal Products

The additional output resulting from a one-unit increase in the use of a particular input, holding all other inputs constant.