If the price of a slice of pizza falls from $2 to $1.5, a pizza-loving consumer will
A) see her purchasing power fall.
B) see her purchasing power rise.
C) substitute more Chinese food for pizza.
D) spend more on soft drinks and less on pizza.

Question

Quizplus · Accepted Answer

When the price of a slice of pizza falls from $2 to $1.5, a pizza-loving consumer's purchasing power rises. This means that she can now afford to buy more slices of pizza with the same amount of money she was spending before. Therefore, she will see the purchasing power rise. None of the other options make sense in this context.

If the Price of a Slice of Pizza Falls from $2