Suppose That Consumers' Preferences Are Well Behaved in That Properties

question 42

Multiple Choice

Suppose that consumers' preferences are well behaved in that properties 4-1 to 4-4 are satisfied.Furthermore,assume that both X and Y are normal goods and that the price of good Y increases.Then,which of the following effects is known with certainty?

• A) The income and substitution effects reinforce one another, leading to an overall increase in the consumption of good X.
• B) The income and substitution effects reinforce one another, leading to an overall decrease in the consumption of good X.
• C) There will be an indeterminate effect on the consumption of good X.
• D) The income and substitution effects will reinforce one another, leading to an overall increase in the consumption of good Y.

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Definitions:

Phenotype

A group of traits in a person that are visible and come about through the way their genetic makeup responds to environmental factors.

X Chromosome

One of the two sex chromosomes, commonly associated with female sex determination in many organisms.

Behavioral Teratogens

Substances or factors that can cause abnormal development or birth defects through their influence on fetal behavior.

Polygenic

Polygenic refers to a trait or condition that is influenced by multiple genes, often resulting in a continuous range of possible phenotypes.