Multiple Choice
A consumer considers apples and oranges to be perfect substitutes,one for one.If apples currently cost $5 per unit and oranges $6 per unit,and if the price of apples increases to $9 per unit:
A) the income effect of the change in demand for apples will be bigger than the substitution effect.
B) there will be no change in demand for oranges.
C) the entire change in demand for apples will be due to the substitution effect.
D) one-quarter of the change in demand for apples will be due to the income effect.
Correct Answer:
Verified
Correct Answer:
Verified
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