Question: In the below figure, a consumer is initially in equilibrium at point C. The consumers income is $400, and the budget line through point C

In the below figure, a consumer is initially in equilibrium at point C. The consumers income is $400, and the budget line through point C is given by $400 = $100X + $200Y. When the consumer is given a $100 gift certificate that is good only at store X, she moves to a new equilibrium at point D.

a. Determine the prices of goods X and Y. Price of X: $ Price of Y: $ b. How many units of product Y could be purchased at point A? c. How many units of product X could be purchased at point E? d. How many units of product X could be purchased at point B? e. How many units of product X could be purchased at point F? f. Based on this consumers preferences, rank bundles A, B, C, and D in order from most preferred to least preferred. (Click to select)

D, C, A, B

A, B, C, D

C, A, B, D

D, B, C, A g. Is product X a normal or an inferior good? (Click to select)

Normal

Inferior

Product Y Product X

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