Assume That Tonya Consumes Only Two Products, Pizza and Potato

question 296

Multiple Choice

Assume that Tonya consumes only two products, pizza and potato chips, out of a given budget. If the price of pizza decreases, then Tonya's consumption of pizza will

• A)decrease due to the income effect.
• B)decrease due to the substitution effect.
• C)increase due to the income effect.
• D)increase due to the law of diminishing marginal utility.

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Definitions:

Manufacturer

A company or entity that produces finished goods from raw materials through the use of equipment and processes.

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In computing, a fixed-sized piece of data handled as a unit by the instruction set or the hardware of the processor.

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A small, fast storage location within a computer's CPU used to hold data and instructions that are currently being processed.

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A collection of data stored in one unit, identified by a filename; can represent documents, programs, or other collections of information.