Accessible description: The figure shows 3 linear budget lin…
Accessible description: The figure shows 3 linear budget lines and 2 indifference curves, where the quantity of gasoline is on the y-axis (gallons per week) and the quantity of coffee (pounds per week) is on the x-axis. Two of the budget lines are parallel to each other. The third has the same horizontal intercept as the further out of the other two and a slope that is smaller in absolute value. Point C is on the budget line that is furthest out and also is on the furthest out indifference curve. Points B and A are on the indifference curve closest to the origin. Point B also intersects the budget line that is to the left of the other that it is parallel with. Point A intersects the budget line with the flatter (smaller) slope. f1q37g1.jpg The substitution effect from a fall in the price of a gallon of gasoline is shown in the above figure by the movement from