Multiple Choice
-Lisa spends all her income on pizzas and DVDs. The above table shows Lisa's marginal utility for pizza and marginal utility for DVDs. Suppose the price of a pizza is $10 and the price of a DVD is $10 and Lisa initially has $40 to spend on the two goods. Lisa gets a raise at work and so she now has $60 to spend on DVDs and pizza. With her increase in income, her consumption of DVDs ________ and hence DVDs are ________ good for Lisa.
A) rises; a normal
B) rises; an inferior
C) falls; a normal
D) falls; an inferior
Correct Answer:
Verified
Correct Answer:
Verified
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