Refer to the following indifference map for a consumer who has an income of $48 to spend on goods X and Y and the market prices of X and Y are both $4: Now suppose the price of good X increases to $12 while the price of good Y remains $4. Utility will be maximized on which indifference curve?
Now suppose the price of good X increases to $12 while the price of good Y remains $4. Utility will be maximized on which indifference curve?
A. I
B. II
C. III
D. On an indifference curve below I
Answer: B
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