If consumption when young and when old are both normal goods, an increase in the interest rate ? A. will always increase the quantity of saving B. will always decrease the quantity of savingC. will increase the quantity of saving…
If income where to double and prices were to to double the budget line would ? A. stay the same B. rotate inward C. shift outward in a parallel fashion D. rotates outward E. shift inward in parallel fashion
Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 A pair of socks is ? A. an inferior effect B. a Geffen goodC. a normal good…
Refer to Exhibit 4, Suppose that the consumer must choose between buying socks and belts Also suppose that the consumer’s income is €100 Suppose that the price of a pair of socks falls from €5 to €2 The substitution effect…
If an increase in a consumer’s income causes the consumers to decrease her quantity demanded of a good, then the good is ? A. a substitute good B. a normal good C. a complementary goodD. an inferior good
Suppose we measure the quantity of good X on the horizontal axis and the quantity of good Y on the vertical axis If indifference curves are bowed inward, as we move from having an abundance of good X to having…
The consumer’s optimal purchase of any two goods is the point where ? A. the budget constraint crosses the indifference curve B. the two highest indifference curves crossC. the consumer reaches the highest indifference curve subject to remaining on the…
The slope at any point on an indifference curve is known as ? A. the marginal rate of substitution B. the marginal rate of trade-off. C. the trade-off rates D. the marginal rate of indifference
Which of the following is not true regarding the outcome of a consumer’s optimization process ? A. The marginal utility per dollar spent on each good is the same B. The marginal rate of substitution between goods is equal to…
A change in the relative prices of which of the following pair of goods would likely cause the smallest substitution effect ? A. right shoes and left shoes B. petrol from BP and petrol from shell C. kit-Kat chocolate snacks…