Scruffie the cat has a budget for cat toys and cat treats. If the price of cat toys decreases, Scruffie will
A) achieve the same level of satisfaction because her budget has not changed.
B) maximize her satisfaction at a higher level.
C) be forced to a lower indifference curve.
D) move to a lower indifference curve and buy more cat treats.

Question

Quizplus · Accepted Answer

When the price of cat toys decreases, Scruffie can buy more toys for the same amount of money, allowing her to achieve a higher level of satisfaction without exceeding her budget. This is because she can now afford a combination of toys and treats that was previously out of reach, leading to an increase in overall utility.

Scruffie the Cat Has a Budget for Cat Toys and Cat