单选题

The diagram illustrates a consumer's allocation of her budget between items X and Y. With an initial budget (BC1 ) she consumes Qa units of item Y. When the price of Y drops, she consumes Qc un its of item Y. Lines BC2 and BC3 are parallel to one another.

【正确答案】 B
【答案解析】

B is correct. When the price of Y falls, the budset constraint shifts outward from BC1 to BC2 , indicating an increase in the consumption of Y. Points a and b reflect the change in consumption of Y due solely to a decrease in price because BC3 reduces her income by a sufficient amount to return herto her original indifference curve. Qc -Qb is the income effect (which is nesative here) because this is an inferior good.