By observing a consumer’s response to a change in price, we can derive the consumer’s demand curve for a good. Panel

(a) shows that at a price for horseback riding of $50 per day, Janet Bain chooses to spend 3 days horseback riding per semester. Panel

(b) shows that a reduction in the price to $25 increases her quantity demanded to 4 days per semester. Points X and Z, at which Ms. Bain maximizes utility at horseback riding prices of $50 and $25, respectively, become points X′

and Z′ on her demand curve,

d, for horseback riding in Panel (b).