Ellen consumes goods X and Y.As she consumes less X,she must be compensated with additional units of Y,and her marginal rate of substitution of X for Y decreases as she consumes more Y.This means that goods X and Y are:
A)ordinary.
B)unique.
C)complements.
D)substitutes.

Question

Quizplus · Accepted Answer

Goods X and Y are ordinary because the diminishing marginal rate of substitution indicates a typical consumer behavior of deriving less satisfaction from each additional unit of a good as they consume more of it, which is characteristic of ordinary goods.

Ellen Consumes Goods X and Y