Question: how to solve When a rational consumer faces a change in both income and prices of goods, how can they determine the new optimal consumption
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When a rational consumer faces a change in both income and prices of goods, how can they determine the new optimal consumption bundle using the concept of utility maximization and budget constraints? Choose only ONE best answer. A By focusing solely on changes in prices and ignoring income changes. B By adjusting consumption to equalize the marginal utility per dollar spent across all goods, taking into account the new budget constraint. C By choosing the bundle with the highest total utility regardless of budget constraints. D By increasing consumption of the most expensive goods firstStep by Step Solution
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