Maude Thinks Delphiniums and Hollyhocks Are Perfect Substitutes, One for One.If

question 19

Multiple Choice

Maude thinks delphiniums and hollyhocks are perfect substitutes, one for one.If delphiniums currently cost $5 per unit and hollyhocks cost $6 per unit and if the price of delphiniums rises to $9 per unit,

• A)the income effect of the change in demand for delphiniums will be bigger than the substitution effect.
• B)1/4 of the change in demand will be due to the income effect.
• C)there will be no change in the demand for hollyhocks.
• D)the entire change in demand for delphiniums will be due to the substitution effect.
• E)3/4 of the change in demand will be due to the income effect.