Following up on the preceding question, instead of assuming Ming has "standard-looking indifference curves," assume that he views X and Y as perfect complements. Everything else in the preceding question stays the same, including the fact that Ming consumes more X and more Y when the price of X decreases and everything else stays the same. Given this new information about Ming's preferences, which of the following statements must be true? O X is a normal good. O Y is a normal good. O The income effect dominates the substitution effect for X. O The income effect dominates the substitution effect for Y. O Each of the preceding statements must be true.
Following up on the preceding question, instead of assuming Ming has "standard-looking indifference curves," assume that he views X and Y as perfect complements. Everything else in the preceding question stays the same, including the fact that Ming consumes more X and more Y when the price of X decreases and everything else stays the same. Given this new information about Ming's preferences, which of the following statements must be true? O X is a normal good. O Y is a normal good. O The income effect dominates the substitution effect for X. O The income effect dominates the substitution effect for Y. O Each of the preceding statements must be true.
Principles of Economics (MindTap Course List)
8th Edition
ISBN:9781305585126
Author:N. Gregory Mankiw
Publisher:N. Gregory Mankiw
Chapter21: The Theory Of Consumer Choice
Section: Chapter Questions
Problem 1PA
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