The figure shows two of Laura's indifference curves and three budget lines: B, when her income is $4 and the price of water is $1.00 a bottle, B₂ when her income is $2.75 and the price of water is $0.50 a bottle, B, when her income is $4 and the price of water is $0.50 a bottle. The price of a pack of mints is $0.50. If the price of a bottle of water falls from $1.00 to $0.50, the substitution effect is the in the quantity of water from 0000 A. decrease; 5 bottles to 3 bottles B. increase; 2 bottles to 3 bottles C. increase; 3 bottles to 5 bottles D. decrease; 3 bottles to 2 bottles 4 3.0 2.5 Mints (packs per day) B₁ B₂ k 25

The figure shows two of Laura's indifference curves and three budget lines: B, when her income is $4 and the price of water is $1.00 a bottle, B₂ when her income is $2.75 and the price of water is $0.50 a bottle, B, when her income is $4 and the price of water is $0.50 a bottle. The price of a pack of mints is $0.50. If the price of a bottle of water falls from $1.00 to $0.50, the substitution effect is the in the quantity of water from 0000 A. decrease; 5 bottles to 3 bottles B. increase; 2 bottles to 3 bottles C. increase; 3 bottles to 5 bottles D. decrease; 3 bottles to 2 bottles 4 3.0 2.5 Mints (packs per day) B₁ B₂ k 25

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter20: Consumer Choice: Maximizing Utility And Behavioral Economics

Section: Chapter Questions

Problem 6WNG

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