Charlie budgets a portion of his income for attending ball games and movies. Assuming he is utility maximizing, what would happen to his consumption of movies if the ticket price fell, everything else being equal? It would stay the same unless the price of ball games changed as well. It would rise. It would fall. Without more information, how he reacts is uncertain. Which statement best explains the answer to the first question? The ratio of the marginal utility of movies to the price of movies went up compared to the ratio for ball games. The change in the price of movies changes Charlie's budget constraint, so he can buy less of both goods. When the price of movies went down, the marginal utility went up. The ratio of the marginal utility of ball games to the price of ball games went up compared to the ratio for movies. Which law does this illustrate? the law of demand the law of consumer sovereignty the law of diminishing marginal utility

According to the law of demand, the quantity of the item purchased depends on the price of the item. When the price of an item is high, the quantity purchased is less. On the other hand, if the price of an item is low, the quantity purchased becomes more respectively. The law of demand occurs because of the diminishing marginal utility. The higher the price, the lower is the demand and the lower the price, the higher is the demand.