Suppose a consumer is currently getting utility from U1 which has the points (x = 12, y = 0), (x = 6, y = 8), and (x = 4, y = 14).  

The price of x is $4.

The price of y is $2.

The consumer's income is $40.

After a change in the price of x to $3, the consumer starts consuming the bundle (x = 10, y = 5).

Are goods x and y gross complements or gross substitutes for this consumer? Explain how your arrived at your answer.

Answer rating: 100% (QA)

To determine whether goods x and y are gross complements or gross substitutes for the consumer we ne... View the full answer