Assume Dawn's budget constraint is represented in the graph. If Dawn's income increases and she spends all her income on these two goods, then Dawn's total utility from consuming these two goods will likely:
A)increase, because she can afford more of both goods now.
B)decrease, because the marginal utility of consuming additional items decreases.
C)decrease, because she would be buying more of these goods than desired.
D)decrease, because the marginal utility of consuming additional items increases.

Question

Assume Dawn's budget constraint is represented in the graph. If Dawn's income increases and she spends all her income on these two goods, then Dawn's total utility from consuming these two goods will likely:
A)increase, because she can afford more of both goods now. 
B)decrease, because the marginal utility of consuming additional items decreases. 
C)decrease, because she would be buying more of these goods than desired. 
D)decrease, because the marginal utility of consuming additional items increases.

Quizplus · Accepted Answer

The Answer of  Assume Dawn's budget constraint is represented in the graph. If Dawn's income increases and she spends all her income on these two goods, then Dawn's total utility from consuming these two goods will likely:
A)increase, because she can afford more of both goods now. 
B)decrease, because the marginal utility of consuming additional items decreases. 
C)decrease, because she would be buying more of these goods than desired. 
D)decrease, because the marginal utility of consuming additional items increases.

Assume Dawn's Budget Constraint Is Represented in the Graph