Billy likes candy and popcorn. Candy sells for $0.50 a bag and popcorn sells for $1 per bag. Currently he is in consumer equilibrium. Then the price of candy rises to $1 a bag. Which statement is true in the new consumer equilibrium?

Question

Answer

Marginal utility per dollar on candy will be equal to 2.

Answer

The marginal utility from candy will decrease.

Answer

The marginal utility from candy will be equal to the marginal utility from popcorn.

Answer

The marginal utility from popcorn will increase.

Answer

Total utility will increase.

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Billy likes candy and popcorn. Candy sells for $0.50 a bag and popcorn sells for...

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