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Question 77

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Use the following to answer questions:
Figure: Income and Substitution Effects Use the following to answer questions: Figure: Income and Substitution Effects   -(Figure: Income and Substitution Effects)  Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. As Carlos moves to his new optimal consumption bundle, we observe that gasoline: A)  is not an ordinary good. B)  is a normal good. C)  is an inferior good. D)  and good L are complements.
-(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects. Carlos is consuming his optimal consumption bundle at point A when the price of gasoline falls. As Carlos moves to his new optimal consumption bundle, we observe that gasoline:


A) is not an ordinary good.
B) is a normal good.
C) is an inferior good.
D) and good L are complements.

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