Jerome consumes only two goods, eggs and beans. His preferences are complete, transitive, monotonic and convex. When the price of beans rises, he buys fewer eggs and the same amount of beans. Based on this information, we can say that:

a. Beans are necessarily normal and eggs are necessarily inferior.
b. Beans are necessarily inferior and eggs are necessarily normal.
c. We can only conclude that beans are necessarily normal.
d. We can only conclude that eggs are necessarily normal.
e. We can only conclude that eggs are necessarily inferior.

B. Beans are necessarily inferior and eggs are necessarily normal

Explanation: He reduces the amount of egg to meet up with the beans, for his satisfaction.

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answer; dividing net income by 1- t ;