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(See Steps) A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios, indicate whether the equilibrium consumption of

Question: A consumer must spend all of her income on two goods (X and Y). In each of the following scenarios, indicate whether the equilibrium consumption of goods X and Y will increase or decrease. Assume good X is an inferior good and good Y is a normal good.

  1. Income doubles.
  2. Income quadruples and all prices double.
  3. Income and all prices quadruple.
  4. Income is halved and all prices double.

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