Jake Applies the Rational Spending Rule and Purchases Five Units

Multiple Choice

Jake applies the rational spending rule and purchases five units of good M and three units of good N.Suppose that the price of N increases.One can predict that Jake will

A) cease purchasing N.
B) reduce purchases of N and increase purchases of M.
C) continue to make the same purchases.
D) reduce purchases of M.
E) increase purchases of N.