Betty consumes only milkshakes and sandwiches and maximizes her total utility. Suppose that the prices of a milkshakes and sandwiches both double and at the same time Betty's income doubles. Betty buys ________ sandwiches and her marginal utility from sandwiches ________.
A) more; increases
B) fewer; decreases
C) more; decreases
D) the same number of; remains the same

Question

Quizplus · Accepted Answer

When both the prices and income double, the relative prices and purchasing power remain unchanged. Therefore, Betty will buy the same number of sandwiches, and her marginal utility from sandwiches remains the same.

Betty Consumes Only Milkshakes and Sandwiches and Maximizes Her Total