Suppose That a Consumer's Preferences Are Well Behaved in That

question 80

Multiple Choice

Suppose that a consumer's preferences are well behaved in that properties 4-1 - 4-4 are satisfied and the initial budget constraint is given by 300 = 2X + 4Y.At the initial budget constraint, this consumer purchases 100 units of good X and 25 units of good Y.Suppose the price of X increases to $4 per unit resulting in a new consumption bundle consisting of 60 units of X and 15 units of Y.Then, slope of the inverse demand for good X over this consumption range is

• A)0.05.
• B)-0.05.
• C)-0.267.
• D)-0.444.

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