Mary increases her consumption of Good X after the price Good Y decreased. For Mary...
a.) Good X is an inferior
b.) Good Y is an inferior good
c.) Good X and Good Y are complements
d.) Good X and Good Y substitues
c.) Good X and Good Y are complements
Iexp;ain. I thinki there is a mistake.
Apologies for the mistake. Let's go through the options again:
a.) Good X is an inferior good: An inferior good is a good for which demand decreases as consumer income increases. If Mary increases her consumption of Good X after the price of Good Y decreased, it suggests that Good X is not an inferior good. So, option a) is incorrect.
b.) Good Y is an inferior good: Similarly, if Mary increases her consumption of Good X after the price of Good Y decreased, it does not necessarily imply that Good Y is an inferior good. So, option b) is also incorrect.
c.) Good X and Good Y are complements: Complementary goods are goods that are often consumed together. If Mary increases her consumption of Good X after the price of Good Y decreased, it suggests that there is a positive relationship between the two goods, indicating that they are complements. For example, if Good X is coffee and Good Y is sugar, Mary might consume more coffee when the price of sugar decreases because she needs sugar to sweeten her coffee. So, option c) is the correct answer.
d.) Good X and Good Y substitutes: Substitutes are goods that can be used in place of each other. However, since Mary increases her consumption of Good X after the price of Good Y decreased, it suggests that Good X and Good Y are not substitutes but rather complements. So, option d) is incorrect.
In conclusion, the correct answer is c.) Good X and Good Y are complements.
The correct answer would be:
c.) Good X and Good Y are complements.
When Mary increases her consumption of Good X after the price of Good Y decreased, it suggests that Good X and Good Y are complements. Complementary goods are those that are typically consumed together because they provide greater satisfaction or utility when used in combination. In this case, the decrease in the price of Good Y has made it more affordable or attractive for Mary to consume, leading to an increase in her consumption of Good X as well.