A. Building the Diagram
Explanation

Getting the tangencies right in one of these diagrams is easier with an order to follow. Start with a budget line and mark the chosen point A, without drawing any curve yet. Then let the price of movies rise, which tilts the budget line inward, and draw only the new line.

The third step is the trick: a dashed line parallel to the new one, running close to A but not through it. Now draw the original indifference curve so that it touches A on the old line and C on the dashed line. Sliding from A to C is the substitution effect. Finally choose B on the new line and draw the lower curve through it; C to B is the income effect. Putting B directly below A, as here, makes the two effects cancel exactly on the horizontal axis. The slider walks through the five steps.

The Steps