Emma consumes only tacos and pizza. They are substitute goods for her. The price of a taco falls. Emma will buy ________ tacos and her marginal utility from the last slice of pizza she eats ________.
A) more; does not change
B) more; decreases
C) the same quantity; does not change
D) less; increases

Question

Quizplus · Accepted Answer

When the price of tacos falls, Emma will buy more tacos because they are cheaper. Since tacos and pizza are substitutes, she will buy fewer pizzas, leading to a decrease in the marginal utility from the last slice of pizza she eats.

Emma Consumes Only Tacos and Pizza