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A Consumer Buys 12 Units of Entertainment,measured on the Horizontal

Question 43

Multiple Choice

A consumer buys 12 units of entertainment,measured on the horizontal axis,and 84 units of "all other things." The consumer's income elasticity of demand is equal to 1 for both goods.If income increases by 10%,then the consumer's marginal rate of substitution at the utility-maximizing market bundle will:


A) increase.
B) decrease.
C) be equal to 1.
D) remain constant.
E) There is insufficient information to answer the question.

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