Mika Spends All of Her Income on Pizza and Gasoline

question 50

Multiple Choice

Mika spends all of her income on pizza and gasoline. Suppose Mika is presented with two options: A and B. Option A will subsidize gasoline by decreasing its price by 50%. Option B will increase Mika's income by the cost of the subsidy in Option A. Which of the following must be true?

• A) Mika will always strictly prefer Option A to Option B.
• B) Mika will always strictly prefer Option B to Option A.
• C) Mika will never prefer Option A to Option B.
• D) Mike will never prefer Option B to Option A.

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