Multiple Choice
Dave consumes two normal goods,X and Y,and is currently at an optimum.If the price of good X falls,we can predict with certainty that
A) Dave will definitely consume more of both goods since his real income has risen.
B) the substitution effect will be positive for good X and negative for good Y.
C) may consume more or less of good X and he will definitely consume less of good Y.
D) the substitution effect will offset the income effect for good X.
Correct Answer:

Verified
Correct Answer:
Verified
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