Economics 9708 · AS & A Level · Indifference curves and budget lines

Indifference curves and budget lines — practice question

In the diagram, the line RS represents the various combinations of goods X and Y that a consumer can buy using her current income. Her initial equilibrium is at M. What might account for a later shift in her equilibrium position to N?

  • Aa change in her tastes
  • Ban increase in the price of X and a fall in the price of Y
  • Can increase in the price of X and a smaller percentage increase in the price of Y
  • Dequal percentage increases in her income and in both prices

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