Question: Consider a consumer's utility function given by u ( x , y ) = 2 x + y . The initial price of good x
Consider a consumer's utility function given by The initial
price of good is per unit, the price of good is unit, and her income is
If the price of good then increases to per unit, which one of the
following statements is correct?
a The consumer decreases her consumption of good by units and increases her consumption of good by units
b None of the other statements is correct
c The consumer's total expenditure on good remains unchanged as she only consumes good
d The consumer decreases her consumption of good by units and increases her consumption of good by units
e The consumer decreases her consumption of good by units and increases her consumption of good by units
f The consumer's total expenditure on good y is unchanged as its price remains the same
g The utility of the consumer increases because she is consuming less of the more expensive good
h The consumer decreases her consumption of good by units and increases her consumption of good by units
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