Casey earns $150 a week and consumes only fish and shrimp.The price of fish is $3 a pound and the price of shrimp is $5 a pound.
If Casey's income rises to $210,the rational spending rule would predict Casey would buy
A)more fish and less shrimp.
B)more fish and more shrimp.
C)less fish and more shrimp.
D)more fish and the same amount of shrimp.

Question

Quizplus · Accepted Answer

With an increase in income, Casey can afford to buy more of both goods, assuming preferences remain the same and both goods are normal goods.

Casey Earns $150 a Week and Consumes Only Fish and Shrimp.The