Assume that Dusty has $30 in income,the price of a loaf of bread is $1.50,and the price of a jar of peanut butter is $3.
If Dusty's income rises to $45,the rational spending rule would predict that Dusty will buy
A)more bread and less peanut butter.
B)more bread and more peanut butter.
C)less bread and more peanut butter.
D)more bread and the same amount of peanut butter.

Question

Quizplus · Accepted Answer

With an increase in income, Dusty can afford to buy more of both goods while maintaining the same marginal utility per dollar spent, according to the rational spending rule.

Assume That Dusty Has $30 in Income,the Price of a Loaf