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.
A) the same amount of; a lower
B) less; a higher
C) less; the same
D) less; a lower

Question

Quizplus · Accepted Answer

When income decreases, Sue will consume less of the normal goods, but 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