Assume That Dusty Has $30 in Income,the Price of a Loaf

question 93

Multiple Choice

Assume that Dusty has $30 in income,the price of a loaf of bread is $1.50,and the price of a jar of peanut butter is $3.
If Dusty's income falls to $20,the rational spending rule would predict that Dusty will buy

• A)more bread and less peanut butter.
• B)less bread and more peanut butter.
• C)less bread and less peanut butter.
• D)more bread and the same amount of peanut butter.

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Definitions:

Price Change

A variation in the cost of goods or services over time, which can result from factors like supply and demand, inflation, or market dynamics.

Income

The amount of money received on a regular basis from work, property, investments, or government benefits.

Utility Function

A mathematical representation of how consumers derive satisfaction from goods and services, assigning numerical values to different bundles of goods.

Income

The amount of money or its equivalent received during a period of time in exchange for labor, services, or goods sold.