Figure 21-3 In each case, the budget constraint moves from BC-1 to BC-2. graph b

Question

Figure 21-3
In each case, the budget constraint moves from BC-1 to BC-2.

graph b

graph a

graph c

graph d

graph b

graph a

graph c

graph d

to a wwwchegg.com/homework-help/questions-and-answersquestioned I cQ Search Firefox has prevented the outdated plugin Adobe Flash from running on http://www.chegg.com. Chegg MENU > Find books, solutionstutors and more.. 1gure n each case, the budget constraint moves from BC-1 to BC-2. (a) (b) BC-2 BC. BC-2 (C) (d) BC BC-2 Refer to Figure 21-3. Which of the graphs in the figure reflects an increase in the price of good Y only? 0 0 0 way 99 Pg

Explanation / Answer

Answer) graph C.

since maximum quantity that can be purchased when spending whole income i.e. Y/Py ( where Py is assumed to be price of good y ) on good y has decreased as the graph shifts from BC1 to BC2, price of only good Y has increased in graph C.

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