Asked by Alexis Klein on Jul 25, 2024
Verified
An increase in the price of a product normally enables a consumer to reach a higher indifference curve.
Indifference Curve
A graph showing different bundles of goods between which a consumer is indifferent, reflecting preferences and utility maximization.
Price Increase
Refers to a situation where the cost of goods or services rises over a period of time.
- Examine how variations in earnings and costs influence the consumer's budgetary constraints and decision-making processes.
Verified Answer
TS
Tanjena SarkerJul 28, 2024
Final Answer :
False
Explanation :
An increase in the price of a product typically reduces a consumer's purchasing power, making it harder for them to reach higher indifference curves, which represent higher levels of satisfaction.
Learning Objectives
- Examine how variations in earnings and costs influence the consumer's budgetary constraints and decision-making processes.