If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g., coffee and cream for a coffee drinker who never varies the amount of cream used in each cup), then
a. there is no substitution effect from a change in the price of coffee.
b. there is no income effect from a change in the price of coffee.
c. Giffen's Paradox must occur if both coffee and cream are inferior goods.
d. an increase in income will not affect cream purchases.
a
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A study that deals with the salaries of university professors would be considered:
A. microeconomics B. real economics C. economic naturalism D. macroeconomics
All else held constant, if the price of a resource used to produce product X falls, the
A. demand curve of X will shift to the right. B. supply curve of X will shift to the left. C. supply curve of X will not shift. D. supply curve of X will shift to the right.
According to Allan Kulikoff, between 1630 and 1670, major surges in productivity caused tobacco output per worker to increase by a factor of:
a. two (doubling). b. three (tripling). c. four (400%). d. five (500%). e. Tobacco productivity held steady during these years.
Economists generally conclude that because GDP rose as a result of the response to the 2005 Hurricanes, they were really a good thing
a. True b. False