Solution-Budget set of the consumer remains the same

Budget set of the consumer remains the same

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Reference no: EM132492367

Analyze if the statements that are presented below are True, False or Uncertain. You MUST justify your answer to get credit. Answers without justification (even if they are correct) will be given zero marks.

A. If consumers' income decreases and the wage of the laborers in the tangerine industry falls, the quantity purchased in this market will rise and the price will fall.

B. If X and Y are substitute goods, the relative change of the demand in X in response to a relative change in the price of good Y is always positive.

C. If the prices of all goods and the consumer's income are multiplied by a constant α > 1, the budget set of the consumer remains the same.

D. If Tom has lexicographic preferences, then the only possibility for Tom to be indifferent between bundles A and B is if A = B.

Reference no: EM132492367

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Budget set of the consumer remains the same

Reference no: EM132492367

Reference no: EM132492367

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