Suppose that bananas are a normal good and Woody is currently consuming 100 bananas at a price of 10 cents each.
A) His Slutsky compensated demand curve going through this point is steeper than his ordinary demand curve.
B) His ordinary demand curve going through this point is steeper than his Slutsky compensated demand curve.
C) His ordinary demand curve is steeper to the left and his Slutsky compensated demand curve is steeper to the right of this point.
D) Whether his ordinary demand curve or his Slutsky compensated demand curve is steeper depends on whether his price elasticity is greater than 1.
E) None of the above.
Correct Answer:
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