Answer
C) less milk and more cereal.
Work Step by Step
As the price of milk increases, Charlie's real income is reduced. Because of this, Charlie reduces his consumption of milk and increases his consumption of cereal.
Principles of Economics, 7th Edition
by Mankiw, N. Gregory
Published by
South-Western College
ISBN 10:
128516587X
ISBN 13:
978-1-28516-587-5
Chapter 21 - Part VII - The Theory of Consumer Choice - Quick Check Multiple Choice - Page 458: 4
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