-Joe has $50, which he spends on movies and pizza. If the price of a pizza falls, Joe can
A) consume more of both goods.
B) consume more pizza only if he gives up some movies.
C) consume more movies only if he gives up some pizza.
D) consume more pizza only.

Question

-Joe has $50, which he spends on movies and pizza. If the price of a pizza falls, Joe can
A) consume more of both goods. 
B) consume more pizza only if he gives up some movies. 
C) consume more movies only if he gives up some pizza. 
D) consume more pizza only.

Quizplus · Accepted Answer

When the price of pizza falls, Joe's purchasing power increases, allowing him to potentially consume more of both goods without giving up either.

-Joe Has $50, Which He Spends on Movies and Pizza