Question: Laura's preferences over commodities x 1 and x 2 can be represented by U(x 1 ,x 2 )=min{3x 1 , x 2 }. She maximizes

Laura's preferences over commodities x₁ and x₂ can be represented by U(x₁,x₂)=min{3x₁, x₂}. She maximizes her utility subject to her budget constraint. Suppose there is an increaseinp1.

Group of answer choices

a. There are both income and substitution effects of this price change.

b. There is a substitution effect but not an income effect of this price change.

c. There is an income effect but not a substitution effectof this price change.

d. It is unclear whether the consumer will buy more or lessx1as a result of the increase in p1.

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