Lisa is spending all of her income on compact discs and downloadable games for her smart phone. She finds that the marginal utility from the last compact disc she buys is 30 and the marginal utility from the last downloadable game is 10.
The price of a compact disc is 15 and the price of a downloadable game is 5. Lisa should A) increase her consumption of compact discs.
B) increase her consumption of downloadable games.
C) not change her consumption of downloadable games and compact discs.
D) decrease the price of downloadable games.
Question 2
In the figure above, a decrease in the price of a bag of potato chips would result in the budget line
A) making a parallel shift toward point a.
B) making a parallel shift toward point c.
C) becoming flatter.
D) becoming steeper.
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