In a simple model of the supply and demand for pizza, when buyers' income increases, the price of pizza ______ and the quantity purchased ______.

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Prepare for the UCF ECO3203 Intermediate Macroeconomics Exam. Study with interactive flashcards and multiple choice questions, each providing insightful hints and explanations. Get ready to excel in your exam!

In a simple model of supply and demand, an increase in buyers' income typically leads to a shift in the demand curve. When consumers have more income, they are willing and able to purchase more goods, including pizza, at any given price. This increased demand generally results in a higher equilibrium price as suppliers respond to greater demand by raising prices. Simultaneously, the quantity of pizza purchased also increases since consumers are eager to buy more due to their increased income.

Thus, when buyers' income increases, the price of pizza rises, and the quantity purchased increases, aligning with the choice that states both the price and quantity increase.