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1 of 12 Questions < Submit All Questions Completed 6 out of 12 Resources Save Answer Jestion Question 1 of 12 > Question Complete The figure below shows Robin's preferences between shoes and makeup. Robin's initial budget line is AB. The point Robin chooses is point C. uestion 4 Question Colete 5 Question Complete 6 Question Complete 7 Question Complete Question The swbstitution effect of the change in the price of makeup is represented in the figure by 9 Question O Question the movement from point to point G. the movement from point B to point. the movement from point B to point F the movement from point to point K 1 Question 12 Question

Answer 1

Answer: 4^th option

Substitution effect is the movement along the same indifference curve. There is a decrease in markup price, which extends the budget line on horizontal axis to the right further; this increases purchasing capacity (indicated through budget line (dotted)) and purchasing motive (indicated through indifference curve). The point K is the meeting point of those, showing the substitution effect.