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

question 113

Multiple Choice

Suppose that a consumer's preferences are well behaved in that properties 4-1 to 4-4 are satisfied and the initial equilibrium consumption bundle consists of 10 units of X and 25 units of Y.If P_Y increases such that the new equilibrium consumption bundle is 15 units of X and 10 units of Y,then goods X and Y are:

• A) complements.
• B) substitutes.
• C) normal goods.
• D) unrelated.

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Definitions:

Z-scores

A standard score indicating how many standard deviations an element is from the mean.

Normal Curve

A bell-shaped curve that represents the distribution of a set of data where most occurrences take place around the mean, tapering off symmetrically towards the extremes.

T-statistic

A type of statistic used in hypothesis testing when the sample size is small and the population variance is unknown, it is based on the Student's t-distribution.

Z-score

A statistic that tells you how many standard deviations a given value is from the mean.