Multiple Choice
Ethan has $150 a month to spend on two normal goods-books and movie theater tickets. The price of a book is $15 and the price of a movie ticket is also $15. He currently consumes four books and six movies each month. If the price of a book drops to $10, the substitution effect predicts that Ethan will consume:
A) more books and more movies.
B) fewer books and fewer movies.
C) more books and fewer movies.
D) fewer books and more movies.
Correct Answer:
Verified
Correct Answer:
Verified
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