Multiple Choice
Suppose that consumers' preferences are well behaved in that properties 4-1 - 4-4 are satisfied.Furthermore, assume that X is a normal good, Y is an inferior good and the price of good X increases.Then the substitution effect will lead consumers to consume
A) more of good X and more of good Y.
B) less of good X and more of good Y.
C) less of good X and less of good Y.
D) more of good X and less of good Y.
Correct Answer:

Verified
Correct Answer:
Verified
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