The diagram shows the indifference curves (IC) for a consumer for goods X and Y together with the consumer's budget lines (BL). good X IC IC₁ BL BL 2 1 good Y If the budget line shifts from BL₁ to BL2, how does this affect the consumer's preferences for goods X and Y when prices remain the same? A He continues to buy the same amounts of X and Y. B He prefers to buy fewer of X and fewer of Y. C He prefers to buy fewer of X and more of Y. D He prefers to buy more of X and fewer of Y.

1. (a)The diagram shows the indifference curves (IC) for a consumer for goods X and Y together with the consumer's budget lines (BL). good X IC IC₁ BL BL 2 1 good Y If the budget line shifts from BL₁ to BL2, how does this affect the consumer's preferences for goods X and Y when prices remain the same? A He continues to buy the same amounts of X and Y. B He prefers to buy fewer of X and fewer of Y. C He prefers to buy fewer of X and more of Y. D He prefers to buy more of X and fewer of Y.[1]

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