As the price of a product in the market basket falls, we move down and to the right along the demand curve for that good and

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    the level of total utility that the consumer can attain with a given level of income increases.
     the consumer moves to a lower indifference due to the fact that the consumer substitutes away from other, higher priced goods.
     a higher indifference is reached due to the fact that the consumers purchasing power has increased..
     Both 1 and 3.
asked Jun 2, 2013 in Economics by anonymous
    

1 Answer

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Both 1 and 3.
answered Jun 3, 2013 by Xyz ~Expert~ (3,650 points)

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