For M > P₂, the Demand Functions for Goods 1

question 49

Multiple Choice

For m > p₂, the demand functions for goods 1 and 2 are given by the equations, - 1 and , where m is income and p₁ and p₂ are prices. Let the horizontal axis represent the quantity of good 1. Let p₁ = 1 and p₂ = 2. Then for m > 2, the income offer curve is

• A) a vertical line.
• B) a horizontal line.
• C) a straight line with slope 2.
• D) a straight line with a slope of.
• E) None of the above.

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