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.

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Chapter21: The Theory Of Consumer Choice
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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 Xis 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.
Transcribed Image Text: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 Xis 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.
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