Equilibrium consumption of goods


Problem: A consumer must spend all of her income on two goods (X and Y). In each of the following scenario, indicate whether the equilibrium consumption of goods X and Y will increase or decrease. Assume good X is a normal good and good Y is an inferior good.

a. Income doubles

b. Income quadruples and all price double

c. Income and all prices quadruples

d. Income is halved and all prices double

Please show work.

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Managerial Economics: Equilibrium consumption of goods
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