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Ann is choosing to buy two goods, X and Y , with prices px and py respectively. Her preferences are strongloy monotonic and locally non-satiated.
Ann is choosing to buy two goods, X and Y , with prices px and py respectively. Her preferences are strongloy monotonic and locally non-satiated. Given the prices and her income, Ann chose to buy (10, 12), which means 10 units of X and 12 units of Y . Ann could also have chosen to buy (11, 11), i.e., it was affordable. In a few days, the prices of the goods changed. In particular, X became cheaper by 6 units while Y became more expensive by 5 units. Could Ann now choose (11, 11)? Why or why not?
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