Ethan Enjoys Buying Books and Going to the Movies

question 74

Multiple Choice

Ethan enjoys buying books and going to the movies. He has income of $150 to spend on these two goods each month. The price of a book is $15 and the price of a movie ticket is also $15. He currently consumes four books and six movies each month. If the price of a book increases to $20, which of the following is true?

• A)The substitution and income effects both predict Ethan will consume more of both goods.
• B)The substitution and income effects both predict Ethan will consume less of both goods.
• C)The substitution effect predicts Ethan will consume more books and fewer movies, and the income effect predicts he will consume less of both goods.
• D)The substitution effect predicts Ethan will consume fewer books and more movies, and the income effect predicts he will consume less of both goods.

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Definitions:

Natural Selection

The method whereby life forms more effectively adjusted to their habitat are more likely to endure and yield a larger progeny.

Behavior Genetics

An investigative field that probes into the contribution of genetic inheritance and environmental factors to behavioral outcomes.

Heredity

The genetic handover of characteristics, either mental or physical, from one generation to the next.

Environmental Experience

The accumulation of knowledge or skill that a person gains from interacting with their surrounds or being exposed to different environmental conditions.