Assume You Are Consuming Two Goods,X and Y

question 56

Multiple Choice

Assume you are consuming two goods,X and Y.X and Y are both normal goods but they are not close complements.The price of good X increases but the price of Y remains unchanged.However,you are given enough additional income to ensure that your utility remains unchanged.What happens to your consumption of good X?

• A)it increases
• B)it stays the same
• C)it increases or decreases
• D)it decreases
• E)it increases over the long run

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Definitions:

TD Canada Trust

One of Canada's prominent banking and financial services providers, known for offering a wide range of personal and business banking solutions.

GICs

Guaranteed Investment Certificates are financial products in Canada offering an assured interest rate over an agreed-upon term.

Simple Interest

The interest calculated only on the principal amount, without the accumulation of prior interest.

Simple Interest

Interest figured only on the principal balance, or on the portion of the principal balance that is still due.