Multiple Choice
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf.Tanning sessions are $20 each,and a round of golf is $40.Sam currently consumes six tanning sessions and two rounds of golf.If the price of a round of golf drops to $20,the income effect:
A) predicts Sam will increase his consumption of both golf and tanning sessions.
B) predicts Sam will double his consumption of golf.
C) predicts Sam will consume more golf and less tanning sessions.
D) predicts Sam will consume less golf and more tanning sessions.
Correct Answer:

Verified
Correct Answer:
Verified
Q34: Ben is asked to rate the utility
Q35: After watching a movie,Alan chooses not to
Q36: If Bob has one piece of gum
Q37: In general,the income effect of an increase
Q38: When a person's income increases:<br>A) more bundles
Q40: The concept of utility:<br>A) cannot be used
Q41: You decide to donate $5 to Jerry's
Q42: This graph shows three different budget constraints:
Q43: The marginal utility gained from the consumption
Q44: This graph shows three different budget constraints: