Suppose that your income is €10,000, the price of petrol is €1 a litre, you consume 1000 litres per year and you spend €9,000 on other goods. Then two things happen: The price of petrol rises to €2 a litre and a distant relative dies leaving you a check for €1,000 per year. If no other changes in prices or income occur, do these changes make you
| A. | Better off | |
| B. | Worse off | |
| C. | Neither better off or worse off | |
| D. | We would need to know your utility function in order to answer this question. |