Question

If the consumer is consuming exactly two goods, and she is always spending all of her money, can both of them be inferior goods?

Answer 1

No,both goods are not a inferior goods.

Inferior goods are those in case of which there is a negative relationship between income and quantity demand .Other Things remain constant quantity demand decreases In response to increase in consumer income .

Answer 2

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$\huge\boxed{Answer}$________✌✌

♠️If two goods are perfect substitutes, what is the demand function for good 2?

x2 = 0 when p2 > p1, x2 = m/p2 when p2 < p1, and anything between

0 and m/p2 when p1 = p2.

♠️Suppose that indifference curves are described by straight lines with a

slope of −b. Given arbitrary prices and money income p1, p2, and m, what

will the consumer's optimal choices look like

♠️The optimal choices will be x1 = m/p1 and x2 = 0 if p1/p2 < b,

x1 = 0 and x2 = m/p2 if p1/p2 > b, and any amount on the budget line if

p1/p2 = b.