Refer to the indifference curve/budget line diagram below in Figure 4 for Jeremiah. He has $300 in income and initially faces prices of the price of X (Px = $1) and the price of Y (Py = $3). Given this information, Jeremiah maximized his utility at point a when BL intercepts/tangents to IC. If the price of good x rises to $3 (Px), how much additional income would Jeremiah need, in order to be able to attain his original level of utility given the new prices? y 150BLSE 100 ICI IC2 BL1 BL2 50 100 300 Figure 4 O a. $450. O b. $150. О с. There is insufficient information to determine the additional income needed. O d. $300.

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Revealed Preferences and Budget Constraint Analysis

Revealed means “Let Out,” and Preference means “Choice”; Choice Reveals Preference.