A consumer purchases quantities of good A and good B in accordance with the rational spending rule.An increase in the price of good A causes the consumer to

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According to the rational spending rule, a consumer allocates their budget in such a way that the marginal utilities obtained from the last dollar spent on each good are equal. Therefore, if the price of good A increases, its marginal utility decreases relative to the marginal utility of good B, meaning the consumer will purchase less of good A to restore the equality of marginal utility and rational spending rule.

A Consumer Purchases Quantities of Good a and Good B