Final answer:
Ms. Jacobs has a higher income this year, but based on the provided information, we can't determine whether she spent more on potatoes. The question involves economic concepts like income effect, substitution effect, and opportunity cost.
Step-by-step explanation:
The question relates to how changes in income affect consumption and expenditure on goods. Last year, Ms. Jacobs bought 50 pounds of potatoes with an income of $15,000. This year, with an income increase to $18,000, she bought 55 pounds of potatoes. To determine if Ms. Jacobs spent more money on potatoes this year, we would need information on the price of potatoes each year. However, with the given information, we can conclude that:
The scenario illustrates common concepts in economics, such as the income effect, which shows how a person's consumption changes with income changes, and the substitution effect that occurs when prices change. For instance, if the price of potatoes remained constant, the increase in income would likely lead Kimberly to increase her consumption of potatoes, supporting the idea that Ms. Jacobs might spend more on potatoes if their price stayed the same. On the other hand, if potato prices increased at a higher rate than her income (like if the cost of a fixed basket of goods increased by 25% while her salary only increased by the same 25%), her purchasing power wouldn't increase and might even decrease.
As for the example of the consultant who makes $200 per hour, it is more economically sensible for her to work and buy vegetables rather than grow them herself due to the concept of opportunity cost. The time she would spend growing vegetables is much more valuable if spent consulting, as she would make a substantial income that she could then use to purchase vegetables, likely more efficiently.