A consumer's bundle includes good X and good Y. If good X is a normal good, goods X and Y are substitutes, and the price of good X rises, the consumer will buy ____ of good X and ____ of good Y.

Question

Quizplus · Accepted Answer

When the price of a normal good (good X) increases, consumers will buy less of it due to the law of demand. Since goods X and Y are substitutes, the consumer will buy more of good Y as they switch from the now more expensive good X to the relatively cheaper good Y.

A Consumer's Bundle Includes Good X and Good Y