# Microeconomics doubt Classic List Threaded 5 messages Open this post in threaded view
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## Microeconomics doubt

 Ques: Goods 1 and 2 are perfect complements and a consumer always consumes them in the ratio of 2 units of Good 2 per unit of Good 1. If a consumer has income 120 and if the price of good 2 changes from 3 to 4, while the price of good 1 stays at 1, then the income effect of the price change (a) is 4 times as strong as the substitution effect. (b) does not change demand for good 1. (c) accounts for the entire change in demand. (d) is exactly twice as strong as the substitution effect. (e) is 3 times as strong as the substitution effect. Ans: U= min(x,2y), s.t. x+3y=120 So, x=24, y=48 Now, change in m= 48*1=48 Substitution effect=4 Income effect=-8 So, answer (d). Am I correct?? Please reply.
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## Re: Microeconomics doubt

 Ans should be c
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## Re: Microeconomics doubt

 How??
 In reply to this post by Nikkita 