By changing the amount of income a consumer has to spend, a change in the price of one good may affect the quantity demanded of another good
a. True
b. False
Indicate whether the statement is true or false
True
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The uncertainty of inflation is likely to affect:
A. Production and consumption decisions. B. Production decisions but not consumption decisions. C. Consumption decisions but not savings. D. The elderly on fixed incomes but not current wage earners.
Assume peanut butter and jelly are complements. Ceteris paribus, an increase in the price of peanut butter will cause the equilibrium price of jelly to
A. Decrease and the equilibrium quantity of jelly to decrease. B. Increase and the equilibrium quantity of jelly to decrease. C. Decrease and the equilibrium quantity of jelly to increase. D. Increase and the equilibrium quantity of jelly to increase.
A budget constraint shows
A) all of the combinations of sets of goods that yield the same level of satisfaction. B) all of the possible combinations of goods that can be purchased with a specific budget. C) all of the goods the consumer gets positive marginal utility from when the goods are consumed. D) all of the goods that a consumer substitutes for other goods when prices fall.
Refer to the given data. If disposable income was $325, we would expect consumption to be:
A. $315.
B. $305.
C. $20.
D. $290.