Multiple Choice
Which of the following statements is false?
A) The income effect of normal goods counters the substitution effect so the demand curve is upsloping.
B) The income effect and the substitution effect reinforce each other when there are price changes for a normal good.
C) The income effect represents the decrease in quantity demanded caused by the implicit change in income due to a fall in the price of an inferior good but not for a normal good.
D) The substitution effect represents the change in quantity demanded solely due to a change in the relative price of a good.
Correct Answer:
Verified
Correct Answer:
Verified
Q65: Use the following to answer question(s): Consumer
Q66: If a consumer is buying two goods
Q67: When there is a difference between the
Q68: The theory of consumer choice, generally, examines
Q69: Michael Kawamura, a careful maximizer of utility,
Q71: If consumer income, preferences, and the prices
Q72: The amount by which total utility increases
Q73: Economists assume that consumers behave in a
Q74: In terms of indifference curves, an increase
Q75: John Smedley, a careful maximizer of utility,