Lucy buys only magazines and CDs. Both are normal goods. Lucy's income decreases, but the prices of magazines and CDs do not change. Marginal utility theory predicts that Lucy will
A) buy fewer magazines and fewer CDs.
B) substitute magazines for CDs.
C) increase her marginal utility from both magazines and CDs by buying more magazines and CDs.
D) buy more magazines and more CDs.

Question

Quizplus · Accepted Answer

When income decreases and prices remain constant, the consumer's budget constraint tightens, leading to a decrease in the quantity of normal goods consumed, such as magazines and CDs.

Lucy Buys Only Magazines and CDs