. john increases his consuption og good X and good Y when his income increases. For john
a. good X and good y are normal goods
b. good X and good y are substitjute goods.
c. good X and good Y are complement goods
A. Good X and Good Y are normal goods
a. Good X and Good Y are normal goods.
When John's income increases, he increases his consumption of both Good X and Good Y. This suggests that both goods are considered normal goods for him. Normal goods are those for which the demand increases when a person's income increases and vice versa.
To determine if good X and good Y are normal goods, substitute goods, or complementary goods for John, it is important to understand the relationship between his income and his consumption of these goods.
If John increases his consumption of both good X and good Y when his income increases, this suggests that both goods are normal goods.
Normal goods are those for which the demand increases as income increases. In other words, as John's income rises, he can afford to purchase more of these goods and chooses to do so.
On the other hand, if John were to increase his consumption of good X and decrease his consumption of good Y (or vice versa) when his income increases, this would indicate that good X and good Y are substitute goods.
Substitute goods are those that serve similar purposes or provide similar satisfaction to consumers. In this case, as John's income increases, he chooses to substitute one good with another to meet his needs or preferences.
Finally, if John were to increase his consumption of good X and see a corresponding increase in his consumption of good Y when his income increases, this would suggest that good X and good Y are complementary goods.
Complementary goods are those that are typically used together or have a mutual beneficial relationship. For example, if John needs good X to utilize or enjoy good Y, then an increase in his income would allow him to purchase more of both goods.
Based on the given scenario, where John increases his consumption of both good X and good Y when his income increases, the correct answer is:
a. good X and good Y are normal goods.