Multiple Choice
Gwen is consuming the optimal consumption bundle of potatoes and steak. Call this bundle A. Her income is $100, the price of steak is $10, and the price of potatoes is $1. Put potatoes on the vertical axis and put steak on the horizontal axis. Her income increases to $500, and the prices of steak and potatoes remain constant. With the increase in income, Gwen changes her consumption of the two goods and now maximizes utility at bundle B. If potatoes are inferior goods for Gwen,
A) at bundle B, Gwen consumes more potatoes.
B) at bundle B, Gwen consumes fewer steaks.
C) at both bundles, the relative price is 10.
D) at both bundles, Gwen consumes the same amount of potatoes and steaks.
Correct Answer:

Verified
Correct Answer:
Verified
Q11: When Laurie asks Matt if he wants
Q86: Ms.Stardoe gets utility from coffee and cream,but
Q144: Economists identify the satisfaction a person derives
Q278: Use the following to answer questions:<br>Figure: Consumer
Q279: Diego spends all of his income on
Q281: Smedley, a careful utility maximizer, consumes peanut
Q285: You have an economics test tomorrow and
Q286: Use the following to answer questions: <img
Q287: Use the following to answer questions:<br>Figure: Consumer
Q288: Housing tends to take up a substantial