To separate the income and substitute effects, the imaginary budget line should be
A) tangent to the new indifference curve and parallel to the new budget line.
B) tangent to the new indifference curve and parallel to the old budget line.
C) tangent to the old indifference curve and parallel to the new budget line.
D) tangent to the old indifference curve and parallel to the old budget line.
C
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Inflation is: a. a reduction in everyone's standard of living
b. a rise in the real prices of all goods and services. c. a general and continuing rise in the money prices of goods and services. d. a continuing rise in everyone's standard of living. e. an increase in the value of money compared to the value of goods.
National income plays a more decisive role in determining investment than it plays in determining consumption spending
Indicate whether the statement is true or false