3. Assume that good x is on the horizontal axis and good y is on the vertical axis, and that preferences are complete, transitive, monotonic and convex. Suppose the income consumption curve is upward sloping and consider the truthfulness of the following statements. I. The price consumption curve as the price of x changes must be upward sloping too. II. The demand curve for good y must be downward sloping. a. Only statement I is true. b. Only statement II is true. c. Both statements I and II are true. d. Neither statement is true.

3. Assume that good x is on the horizontal axis and good y is on the vertical axis, and that preferences are complete, transitive, monotonic and convex. Suppose the income consumption curve is upward sloping and consider the truthfulness of the following statements. I. The price consumption curve as the price of x changes must be upward sloping too. II. The demand curve for good y must be downward sloping. a. Only statement I is true. b. Only statement II is true. c. Both statements I and II are true. d. Neither statement is true.

Principles of Microeconomics

7th Edition

ISBN:9781305156050

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter21: The Theory Of Consumer Choice

Section: Chapter Questions

Problem 5PA

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