Economics (AS & A Level) · Oct / Nov 2021 · Paper 33 · Question 7

A consumer demands two goods, X and Y. The consumer's initial equilibrium is at R and final equilibrium at T. The indifference curve diagram shows the effect of a fall in the price of good X and the resulting income and substitution effects. What can be concluded from the diagram about the nature of good X and the nature of its relationship with good Y?

1. Anature of good X: inferior; relationship between good X and good Y: complements
2. Bnature of good X: inferior; relationship between good X and good Y: substitutes
3. Cnature of good X: normal; relationship between good X and good Y: complements
4. Dnature of good X: normal; relationship between good X and good Y: substitutes

As printed in the paper