Use the Following to Answer Questions

Multiple Choice

Use the following to answer questions:
Figure: Income and Substitution Effects
-(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. The dashed line tangent to I₁ shows a hypothetical budget line reflecting:

A) the original income, the original price of cell phone minutes, and the new price of gasoline.
B) the new price of gasoline in terms of cell phone minutes and a change in income to keep Carlos on the original indifference curve.
C) the new price of gasoline in terms of cell phone minutes and a change in income to allow Carlos to reach an indifference curve higher than I₁.
D) the income and substitution effects.