According to the substitution effect, if the price of a product goes down
A. the consumer will not change the level of purchases of the good when the price changes, making the demand curve a vertical line.
B. the consumer will buy more of the good at the lower price than at a higher price, creating a downward sloping demand curve.
C. the consumer will buy more of the good at a lower price than at a higher price, creating a horizontal demand curve.
D. the real income of the consumer will increase, causing the consumer to want to buy more of the good, creating a downward sloping demand curve.
Answer: B
You might also like to view...
The accumulation of international debt increased the debt service requirements of the indebted countries. After the debt crisis began, this caused
A) the adoption of expansionary policies to return to growth. B) large capital inflows to service the debt. C) the adoption of strongly contractionary policies to reduce consumption and government deficits. D) an intensification of industrial policies targeted on import substitutes. E) a reduction in inequality.
Which list ranks assets from most to least liquid?
a. currency, demand deposits, money market mutual funds b. currency, money market mutual funds, demand deposits c. money market mutual funds, demand deposits, currency d. demand deposits, money market mutual funds, currency
China has invested heavily in turbine manufacturing and in 2009 had become the world's largest wind power market. The investment in turbine manufacturing is an example of ________ investment.
A. intangible capital B. tangible capital C. social capital D. human capital
Refer to the information in Figure 16.5 below to answer the question(s) that follow.
?Figure 16.5Figure 16.5 shows the marginal benefits of emitting pollution for the only two chemical companies in an industry, Alpha Chemicals and Beta Chemicals. Before any tax on pollution emissions is imposed, each company views pollution as being free.Refer to Figure 16.5. Before any tax on pollution is imposed, Beta Chemicals is emitting ________ tons of pollution.
A. 25 B. 50 C. 75 D. 100