Chris chooses between two goods x and y see figure below at, Ask an Expert

Economics

Chris chooses between two goods, X and Y (see figure below). At first, the price of X is low and the price of Y is high (budget line B1). Chris tells you his best affordable combination of X and Y is at point A. Then the price of X rises, while the price of Y falls (budget B2). Chris tells you that at these new prices, his optimal consumption bundle is still point A. What must be true of Chris's preferences?

A) Chris prefers X to Y.

B) Chris prefers Y to X.

C) X and Y are perfect complements.

D) X and Y are perfect substitutes.

E) Chris's preferences must violate one of our assumptions about consumer behavior.

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Business Economics, Economics

Category:- Business Economics
Reference No.:- M91387848

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