Answer to Question #106830 in Microeconomics for Steve

Question

Consider two goods, apples and pears, available for consumption. Assume that the price of apples changes while the price of pears remains fixed. For these two goods, the price consumption curve illustrates:
1) relationship between price of X and consumption of Y
2) utility-maximizing combinations of X and Y for each price of X
3) relationship between the price of Y and consumption of X
4) utility-maximizing combinations of X and Y for each quantity of X
5) combinations of apples and pears that a consumer can afford to buy

Answer 1

Answer: For these two goods, the price consumption curve illustrates combinations of apples and pears that a consumer can afford to buy.