(Solved): 6 ) Suppose that a consumer's preferences are well behaved in that properties 4-1 to 4-4 (completene ...

6 ) Suppose that a consumer's preferences are well behaved in that properties 4-1 to 4-4 (completeness, more is better, diminishing marginal rate of substitution, and transitivity) are satisfied and the initial budget constraint is given by

. At the initial budget constraint, this consumer purchases 100 units of good X and 25 units of good Y. Suppose the price of X increases to

per unit, resulting in a new consumption bundle consisting of 60 units of X and 15 units of Y . Then, the slope of the inverse demand for good X over this consumption range is A) 0.05 . B) -0.05 . C) -0.267 . D) -0.444 . Answer is 7. Suppose that a consumer's preferences are well behaved in that properties 4-1 to 4-4 (completeness, more is better, diminishing marginal rate of substitution, and transitivity) are satisfied and the initial equilibrium consumption bundle consists of 100 units of X and 50 units of Y . If

decreases such that the new equilibrium consumption bundle is 150 units of

and 75 units of

, then goods

and

are E) complements. F) substitutes. G) inferior goods. H) unrelated. Answer is