-Referring to the above table, suppose Carl's ratios of marginal utility of beer to the price of beer and the marginal utility of hotdogs to the price of hotdogs are equal. If the price of beer increases
A) Carl will probably consume more beer and fewer hotdogs.
B) Carl will probably consume less beer and fewer hotdogs.
C) Carl will probably consume less beer and more hotdogs.
D) Carl will still consume the same amount of beer and hotdogs.

Question

-Referring to the above table, suppose Carl's ratios of marginal utility of beer to the price of beer and the marginal utility of hotdogs to the price of hotdogs are equal. If the price of beer increases
A) Carl will probably consume more beer and fewer hotdogs. 
B) Carl will probably consume less beer and fewer hotdogs. 
C) Carl will probably consume less beer and more hotdogs. 
D) Carl will still consume the same amount of beer and hotdogs.

Quizplus · Accepted Answer

When the price of beer increases, the ratio of the marginal utility of beer to its price decreases, making beer less attractive compared to hotdogs. As a result, Carl will likely consume less beer and substitute it with more hotdogs to maximize his utility.

-Referring to the Above Table, Suppose Carl's Ratios of Marginal