John is allocating his household expenditure between groceries and housing in order to maximize total utility. For the quantities of groceries and housing he has chosen,
. an increase in the price of housing will, ceteris paribus,
B. reduce the marginal utility of a unit of housing.
A• increase the marginal utility per dollar spent on housing.
C. increase the marginal utility of a unit of housing.
DO have no effect on the marginal utility per dollar spent on housing.
E. reduce the marginal utility per dollar spent on housing.

Q&A Education