Marginal utility theory predicts that an increase in income means that the consumption of
A) all goods will increase.
B) normal goods will increase and consumption of inferior goods will decrease.
C) inferior goods will increase and consumption of normal goods will decrease.
D) None of the above answers is correct.

Question

Quizplus · Accepted Answer

Marginal utility theory suggests that as income increases, consumers will buy more normal goods (which they prefer when they have more money) and less of inferior goods (which they buy less of as their income rises).

Marginal Utility Theory Predicts That an Increase in Income Means