-If Sue is consuming two normal goods and her income decreases, then her best affordable bundle of goods will contain ________ goods with ________ marginal rate of substitution as her bundle prior to her income change.

Question

Quizplus · Accepted Answer

When Sue's income decreases, she will consume less of the normal goods because she can afford less. However, the marginal rate of substitution remains the same because it depends on her preferences, not her income.

-If Sue Is Consuming Two Normal Goods and Her Income