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
A)Lucy buys more magazines and more CDs.
B)Lucy buys fewer magazines and fewer CDs.
C)Lucy's demand curve for magazines shifts leftward.
D)Lucy's demand curve for CDs shifts leftward.
E)B,C,and D are correct.

Question

Quizplus · Accepted Answer

Since both magazines and CDs are normal goods, a decrease in Lucy's income would lead to her buying fewer of both, as she has less money to spend on goods in general. This decrease in demand due to lower income would shift the demand curves for both magazines and CDs leftward, indicating a decrease in quantity demanded at each price level.

Lucy Buys Only Magazines and CDs