Figure: Income and Substitution Effects
(Figure: Income and Substitution Effects) Look at the figure Income and Substitution Effects.Carlos is originally consuming his optimal consumption bundle at point A in the figure when the price of gasoline falls.As Carlos moves to his new optimal consumption bundle, we observe that gasoline:
A) is not an ordinary good.
B) is a normal good.
C) is an inferior good.
D) and good L are complements.
Correct Answer:
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