Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Immediately after the rise in price A)MUX/PX MUY/PY, and then Ron increases his consumption of Y. B)MUX/PX MUY/PY, and then Ron decreases his consumption of Y. C)MUX/PX

Question

Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Immediately after the rise in price A)MUX/PX > MUY/PY, and then Ron increases his consumption of Y. B)MUX/PX > MUY/PY, and then Ron decreases his consumption of Y. C)MUX/PX < MUY/PY, and then Ron increases his consumption of Y. D)MUX/PX < MUY/PY, and then Ron decreases his consumption of Y. E)MUX/PX > MUY/PY, and then Ron increases his consumption of X and Y.

Quizplus · Accepted Answer

The Answer of Ron starts out in consumer equilibrium, consuming two goods, X and Y. The price of Y rises. Immediately after the rise in price A)MUX/PX > MUY/PY, and then Ron increases his consumption of Y. B)MUX/PX > MUY/PY, and then Ron decreases his consumption of Y. C)MUX/PX < MUY/PY, and then Ron increases his consumption of Y. D)MUX/PX < MUY/PY, and then Ron decreases his consumption of Y. E)MUX/PX > MUY/PY, and then Ron increases his consumption of X and Y.

Ron Starts Out in Consumer Equilibrium, Consuming Two Goods, X