Business, 19.02.2020 05:41 mayratrejorod3

A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios, indicate whether the equilibrium consumption of goods X and Y will increase or decrease. Assume good X is a normal good and good Y is an inferior good. A. Income doubles. 1. Consumption of good X will increase and consumption of good Y will increase. 2. Consumption of good x will increase and consumption of good Y will decrease. 3. Nothing will happen to the consumption of either good. 4. Consumption of good X will decrease and consumption of good Y will increase. B. Income quadruples and all prices double. 1. Consumption of good X will decrease and consumption of good Y will decrease. 2. Consumption of good X will decrease and consumption of good Y will increase. 3. Nothing will happen to the consumption of either good. 4. Consumption of good X will increase and consumption of good Y will decrease. C. Income and all prices quadruple. 1. Consumption of good X will increase and consumption of good Y will increase. 2. Nothing will happen to the consumption of either good. 3. Consumption of good X will increase and consumption of good Y will decrease. 4. Consumption of good X will decrease and consumption of good Y will increase. D. Income is halved and all prices double. 1. Consumption of good X will decrease and consumption of good Y will increase. 2. Nothing will happen to the consumption of either good. 3. Consumption of good x will increase and consumption of good Y will decrease. 4. Consumption of good X will decrease and consumption of good Y will decrease.

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A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios,...

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