Ethan enjoys buying books and going to the movies. He has income of $150 to spend on these two goods each month. The price of a book is $15 and the price of going to the movies is also $15. He currently consumes four books and six movies a month. If the price of a book drops to $10, the substitution effect would predict:
A. Ethan would consume more of each good.
B. Ethan would consume less of each good.
C. Ethan would consume fewer books and more movies.
D. Ethan would consume more books and fewer movies.
Answer: D
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