Naturally, when prices change utility maximizing consumption changes as well. In the graph shown to the right, the price of dining out fell changing the slope of the budget constraint. Our consumer is now on the blue budget constraint. The highest indifference curve she can now reach is the green one shown.

   Notice, that she dines out more now that the price has fallen, just as the law of demand predicted. Since the price ratio changed she changes her consumption so that her new MRS is the same as the new price ratio.

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