Quinn's income to spend each month on two normal goods,bowling or eating out,is $100.It costs $10 to bowl for the night,and it costs $20 for Quinn to eat at a restaurant.Quinn currently consumes four nights of bowling and three meals at a restaurant.If the price of bowling increased to $15,the income effect would predict:
A) Quinn would consume more of each good.
B) Quinn would consume less of each good.
C) Quinn would consume more bowling and less meals out.
D) Quinn would consume less bowling and more meals out.

Question

Quizplus · Accepted Answer

When the price of bowling increases, Quinn's real income effectively decreases, leading to a reduction in the consumption of both normal goods due to the income effect.

Quinn's Income to Spend Each Month on Two Normal Goods,bowling