Richard has well-behaved preferences and consumes only oranges and apples. Apple is a normal good, while orange is an inferior good for Richard. The price of apples increases, and his income increases simultaneously. After this change in price and income, Richard is as well off as before the change in his new optimum. Which of the following statements is TRUE?

Question

Richard has well-behaved preferences and consumes only oranges and apples. Apple is a normal good, while orange is an inferior good for Richard. The price of apples increases, and his income increases simultaneously. After this change in price and income, Richard is as well off as before the change in his new optimum. Which of the following statements is TRUE?

Answer

After the change, Richard will buy more of both goods.

Answer

After the change, Richard will buy fewer apples and more oranges.

Answer

After the change, Richard will buy more apples and fewer oranges.

Answer

After the change, Richard will buy fewer of both goods.

Crowdly

Richard has well-behaved preferences and consumes only oranges and apples. Apple...

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