Ouomit Quiz waya pends her $50 budget on two goods, cans of tuna and bottes of ginger ale. Initially, the marginal utility per dollar she spends on tuna is equal to the marginal utility per dollar she spends on ginger ale. Then the price of ginger ale decreases, while her income and the price of tuna does not change a. Her marginal ubity from consuming ginger ale b. The marginal utity per dollar she spends on ginger ale e. Because of the substhution effect, Maya wil buy more ginger ale. Can we condlude that ginger ale isa nomal good? OA No, because ginger ale is an inferior good. B. No, because ginger ale is a Gifen good. OC Yes, ginger ale must be a normal good. OD. No, because nomal and interior good designations are related to the income effect, not the subatihution effect 4. As Maya adjusts to the change in the price of ginger ale, her marginal utility per dollar spent on tuna wil OA decrease because she will buy less tuna OB. norease because she will buy less tuna Oc norease because she will buy more tuna OD. decrease because she wil buy more tuna

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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Maya spends her $50 budget on two goods, cans of tuna and bottles of ginger ale. Initially, the marginal utility per dollar she spends on tuna is equal to the marginal
ublity per dollar she spends on ginger ale. Then the price of ginger ale decreases, while her income and the price of tuna does not change.
a. Her marginal utlity from consuming ginger ale
b. The marginal utility per dollar she spends on ginger ale
e. Because of the substitution effect, Maya will buy more ginger ale. Can we conclude that ginger ale is a normal good?
OA No, because ginger ale is an inferior good.
OB. No, because ginger ale is a Gifen good.
OC. Yes, ginger ale must be a normal good.
OD. No, because normal and inferior good designations are related to the income effect, not the substitution effect
d. As Maya adjusts to the change in the price of ginger ale, her marginal utility per dollar spent on tuna will
OA decrease because she will buy less tuna.
OB. increase because she will buy less tuna
Oc. ncrease because she will buy more tuna.
OD. decrease because she will buy more tuna.
Transcribed Image Text:Quiz Maya spends her $50 budget on two goods, cans of tuna and bottles of ginger ale. Initially, the marginal utility per dollar she spends on tuna is equal to the marginal ublity per dollar she spends on ginger ale. Then the price of ginger ale decreases, while her income and the price of tuna does not change. a. Her marginal utlity from consuming ginger ale b. The marginal utility per dollar she spends on ginger ale e. Because of the substitution effect, Maya will buy more ginger ale. Can we conclude that ginger ale is a normal good? OA No, because ginger ale is an inferior good. OB. No, because ginger ale is a Gifen good. OC. Yes, ginger ale must be a normal good. OD. No, because normal and inferior good designations are related to the income effect, not the substitution effect d. As Maya adjusts to the change in the price of ginger ale, her marginal utility per dollar spent on tuna will OA decrease because she will buy less tuna. OB. increase because she will buy less tuna Oc. ncrease because she will buy more tuna. OD. decrease because she will buy more tuna.
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