Suppose $U = \min ( X , Y )$ and the price of X is 1,the price of Y is 1 and income is $12.If the price of X increases to 2,the substitution effect is
A)2
B)-1
C)0
D)-2

Question

Quizplus · Accepted Answer

The substitution effect is zero because the utility function $U = \min(X, Y)$ implies perfect complements, meaning the consumer will always consume X and Y in equal amounts. An increase in the price of X does not change the consumption ratio, so there is no substitution effect.

Suppose U=min⁡(X,Y)U = \min ( X , Y )U=min(X,Y) And the Price of X Is 1,the Price of Y

Suppose $U = \min ( X , Y )$ And the Price of X Is 1,the Price of Y