Table 6.5
-Refer to Table 6.5, which lists the values of Harry Taber's marginal utility and marginal utility per dollar for burgers and sushi rolls.Assume that the price of the burgers is $4 and the price of sushi rolls is $2.When Harry's income is $14 he buys two burgers and three sushi rolls.The last column lists the values of the marginal utility per dollar for sushi rolls when the price of sushi rolls decreases to $1.Complete this statement: As a result of the change in price, the marginal utility of each sushi roll Harry consumes increases, and
A) the substitution effect of the price change will cause Harry to buy more sushi rolls and fewer burgers.
B) the substitution effect of the price change will cause Harry to buy more sushi rolls if they are a normal good, and fewer sushi rolls if they are an inferior good.
C) the substitution effect will cause Harry to buy another burger because his purchasing power has increased.
D) the substitution effect will cause Harry to buy fewer sushi rolls.
Correct Answer:
Verified
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