A consumer has been buying 5 magazines and 2 books a month for many months. The price of books then increases. To attain a new optimum, the consumer will
A) buy more magazines because they are now relatively more valuable than they were before, while continuing to buy the same number of books.
B) buy more books because they are now relatively more valuable than they were before.
C) buy the same number of books and magazines as before because they provide different types of utility.
D) buy fewer books than before because they are relatively more expensive than they were before.

Question

Quizplus · Accepted Answer

With the increase in price of books, they have become relatively more expensive compared to magazines. Therefore, it makes sense for the consumer to reduce the number of books purchased and continue buying the same number of magazines to attain a new optimum.

A Consumer Has Been Buying 5 Magazines and 2 Books