A consumer buys 12 units of entertainment and 84 units of all other things. The consumer's...

 

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A consumer buys 12 units of entertainment and 84 units of "all other things." The consumer's income elasticity of demand is greater than 1 for entertainment and less than 1 for all other things. If income increases by 10%, then the consumer's marginal rate of substitution at the utility Intigso to ylidneua ert Ibes X lo noltenidmo maximising market bundle will: to pone sltbes S to eohd increase. stn to a. b. decrease. C. be equal to 1. d. remain constant. е. There is insufficient information to answer the question. A consumer buys 12 units of entertainment and 84 units of "all other things." The consumer's income elasticity of demand is greater than 1 for entertainment and less than 1 for all other things. If income increases by 10%, then the consumer's marginal rate of substitution at the utility Intigso to ylidneua ert Ibes X lo noltenidmo maximising market bundle will: to pone sltbes S to eohd increase. stn to a. b. decrease. C. be equal to 1. d. remain constant. е. There is insufficient information to answer the question.

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If were talking about the marginal rate of substitution we need to know the substitution of whi... View the full answer