Goods 1 and 2 Are Perfect Complements, and a Consumer

Goods 1 and 2 are perfect complements, and a consumer always consumes them in the ratio of 2 units of good 2 per unit of good 1.If a consumer has an income of $200 and if the price of good 2 changes from $4 to $5, while the price of good 1 stays at $1, then the income effect of the price change

A) does not change demand for good 1.
B) is exactly twice as strong as the substitution effect.
C) is 5 times as strong as the substitution effect.
D) accounts for the entire change in demand.
E) is 4 times as strong as the substitution effect.

Correct Answer:

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