2) A consumer of two goods, either 1 or 2, has a utility function U (X1, X2) = x1 0,6.x2 0.4, where x denotes units of good 1 and x2 units of good 2. The price of good 1 is 5 euros per unit, the price...

2) A consumer of two goods, either 1 or 2, has a utility function U (X1, X2) = x1 0,6.x2 0.4, where x denotes units of good 1 and x2 units of good 2. The price of good 1 is 5

euros per unit, the price of good 2 is 3 euros per unit and the consumer's income is 150 euros. Suppose only the price of good 1 changes and so does the new one

price is p1‘ = 2.

Then the Slutsky substitution effect with respect to good 1 is

Choose one:

1. A) Not defined


2. B) 10.8


3. C) 8.8


4. D) 7.8


5. E) 9.8