The substitution effect shows that
A) if the price of a good increases, consumers buy more of that good and less of all others.
B) if the price of a good falls relative to all other goods, consumers buy less of that good and more of all others.
C) if the price of a good falls, consumers buy less of all goods.
D) if the price of a good rises, consumers buy less of that good and more of others.
Answer: D
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The supply curve of a public good shows
A) the marginal cost of producing each unit of the good. B) the total quantities that all producers are willing and able to supply at each price. C) the maximum amount suppliers require to produce each quantity of the good. D) the total cost of producing each unit of the good.
A subsistence economy is
a. a very low income economy. b. an economy in which people make what they consume. c. an economy in which people receive food for pay. d. all of the above.
If the market price of oats is $2.5 per bushel and a farmer decides to sell at $2.8 per bushel, he is likely to sell:
a. more than 5 bushels per day. b. more than 10 bushels per day. c. less than 5 bushels per day. d. 10 bushels per day. e. nothing.
"Peak pricing" can often improve economic efficiency
a. True b. False Indicate whether the statement is true or false