Suppose That Consumers' Preferences Are Well Behaved in That Properties

question 152

Multiple Choice

Suppose that consumers' preferences are well behaved in that properties 4-1 - 4-4 are satisfied.Furthermore, assume that both X and Y are inferior goods and the price of good Y 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.

---

Definitions:

Short-Term Memory

Short-term memory is a cognitive system that temporarily holds a limited amount of information in an accessible state for cognitive tasks.

Encoding Specificity

The principle that recall is more effective when the context at the time of encoding matches the context at the time of retrieval.

Retrograde Amnesia

A condition characterized by an inability to recall memories formed before the onset of amnesia.

Global Amnesia

A rare condition characterized by the sudden loss of all memories and the ability to form new ones, often temporary and without an identifiable cause.