Marginal utility theory predicts that when income increases a
A) person's total utility will not change.
B) person might increase the consumption of some normal goods and decrease the consumption of other normal goods.
C) person's consumption of normal goods will increase.
D) None of the above answers is correct because marginal utility theory does not address how demand changes in response to changes in income.

Question

Quizplus · Accepted Answer

Marginal utility theory suggests that as income increases, a person will increase their consumption of normal goods because they can afford more, leading to higher total utility.

Marginal Utility Theory Predicts That When Income Increases a