Kimberly has $1,000 per year to spend between $50 concert tickets and $200 per night getaways. Her utility maximizing combination is 8 concerts and 3 overnight getaways. She recently received a promotion on her job and now she can spend up to $2000 per year on these two items. Her new utility maximizing combination will depend in part on what? Group of answer choices The substitution effect. The income effect. The degree to which concerts and overnight getaways are normal goods or inferior goods. The fact that concerts and getaways are fungible goods.
Kimberly has $1,000 per year to spend between $50 concert tickets and $200 per night getaways. Her utility maximizing combination is 8 concerts and 3 overnight getaways. She recently received a promotion on her job and now she can spend up to $2000 per year on these two items. Her new utility maximizing combination will depend in part on what? Group of answer choices The substitution effect. The income effect. The degree to which concerts and overnight getaways are normal goods or inferior goods. The fact that concerts and getaways are fungible goods.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Kimberly has $1,000 per year to spend between $50 concert tickets and $200 per night getaways. Her utility maximizing combination is 8 concerts and 3 overnight getaways.
She recently received a promotion on her job and now she can spend up to $2000 per year on these two items. Her new utility maximizing combination will depend in part on what?
Group of answer choices
The substitution effect.
The income effect.
The degree to which concerts and overnight getaways are normal goods or
inferior goods.
The fact that concerts and getaways are fungible goods.
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