Suppose the price of soda is 2 each and the price of a pizza slice is 4 each. David maximizes his utility by buying only sodas and pizza. He buys 5 sodas and 10 slices of pizza. If the price of a soda increases to 3 each, David will
A) decrease the number of sodas bought and the demand curve for sodas will shift leftward.
B) decrease the number of sodas bought and move along the demand curve for soda.
C) buy more pizza and move along the demand curve for pizza.
D) buy less pizza and the demand curve for pizza will shift leftward.
Question 2
Individual economic decisions are coordinated by
A) markets through adjustments in sales levels.
B) markets through adjustments in prices.
C) government through adjustments in sales taxes.
D) government through adjustments in income taxes.
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