Goods 1 and 2 Are Perfect Complements, and a Consumer

question 26

Multiple Choice

Goods 1 and 2 are perfect complements, and a consumer always consumes them in the ratio of 2 units of good 2 per unit of good 1.If a consumer has an income of $200 and if the price of good 2 changes from $4 to $5, while the price of good 1 stays at $1, then the income effect of the price change

• A)does not change demand for good 1.
• B)is exactly twice as strong as the substitution effect.
• C)is 5 times as strong as the substitution effect.
• D)accounts for the entire change in demand.
• E)is 4 times as strong as the substitution effect.

---

Definitions:

Kilometers Wide

A measurement indicating that the width of a geographical feature or object extends for several kilometers.

Basaltic Lava

A type of lava originating from mafic rock, characterized by low viscosity and a high content of magnesium and iron, making it very fluid.

Iron-Rich Minerals

Minerals that contain a significant amount of iron, such as hematite, magnetite, and siderite, crucial for various geological and industrial processes.

Hot Spot

A location on the Earth's surface that experiences intense volcanic activity, typically resulting from a plume of hot material rising from deep within the mantle.