O Suppose a Giffen good X. Its price increases from p, to p > P. The quantity demanded of good X is q. Which of the following is true? (1 Point) (a) The substitution effect decreases q but the income effect increases q and over- come the substitution effect. Overall increases. decreases. increases. (b) Both the income and substitution effects decrease q. Overall (e) Both the income and substitution effects increase q. Overall (d) The income effect decreases q but the substitution effect increases q and over- come the income effect. Overall q increases. If the cross price elasticities of goods X and Y is negative, then... (1 Point) (a) X and Y are substitutes. (b) The demand for X always equals the demand for Y. (c) X and Y are complements. (d) None of the above. Suppose an individual who derives utility u(x, y) from consuming a units of the good X and y units of the good Y. Prices of goods X and Y are respectively p, 1 and Py p. Furthermore, the individual has a budget m. What is the demand for Y if the utility function is: u(x, y) = min{z, ay}. (1 Point) (a) y(p,m)= am 1+p (b) y(p,m): a+p (c) y(p,m) = a+p (d) y(p,m)=p Same setup as (A) with u(x, y) = ax + y and op < 1. What is the demand for X? (a) x(p,m)=m (1 Point) (b) x(p,m)=0 (c) x(p,m) = m (d) x(p,m)=am Suppose a normal good X. Its price increases from p, to p > P. The quantity demanded of good X is q. Which of the following is true? (1 Point) (a) The substitution effect increases q but the income effect decreases and over- come the substitution effect. Overall decreases. (b) The substitution effect decreases q but the income effect increases q and over- come the substitution effect. Overall increases. (e) Both the income and substitution effects increase q. Overall q increases. (d) Both the income and substitution effects decrease q. Overall qe decreases. Suppose an inferior good X (not Giffen). Its price increases from pa to pr> Pr. The quantity demanded of good X is q. Which of the following is true? (1 Point) (a) The income effect increases q but the substitution effect decreases q and over- come the income effect. Overall q decreases. (b) Both the income and substitution effects decrease q. Overall q decreases. (c) The substitution effect decreases q but the income effect increases q and over- come the substitution effect. Overall increases.