Suppose a consumer who purchases only two uds is making a utility-maximizing choice and then the price of one of the goods decreases. What will happen?
? The consumer's purchasin "er will increase.
? The consumer's utility will increase.
? The consumer's income will increase.
? Both
a and
b.
? All of the above.
Question 18 (Mandatory) (1.2 points)
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An individual's demand curve for
x
? Shows that the income effect is always negative.
? Depends on how the individual's utility-maximizing choices change when the price of
x changes.
? Depends on how the individual's money income changes when the price of
x changes.
? Depends on how the individual's preferences change when the price of
x changes.
? Both
a and
c.
