Suppose the income-consumption curve for goods X and Y is upward sloping. If the price of good Y increases and the income-consumption curve rotates in clockwise fashion, then we know that:

Question

Quizplus · Accepted Answer

X and Y are substitutes because when the price of Y increases, the income-consumption curve rotates clockwise, indicating that consumers are consuming less of Y and more of X.

Suppose the Income-Consumption Curve for Goods X and Y Is