Multiple Choice
Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of X rises. Immediately after the rise in price
A) MUX/PX > MUY/PY, and then Ron increases his consumption of X.
B) MUX/PX > MUY/PY, and then Ron decreases his consumption of X.
C) MUX/PX < MUY/PY, and then Ron increases his consumption of X.
D) MUX/PX < MUY/PY, and then Ron decreases his consumption of X.
E) MUX/PX > MUY/PY, and then Ron increases his consumption of X and Y.
Correct Answer:

Verified
Correct Answer:
Verified
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