When we derive the demand curve for a good, we should remember that the
a. income effect must be greater than the substitution effect.
b. substitution effect must be greater than the income effect.
c. substitution effect must be in the same direction as the income effect.
d. income effect and the substitution effect may work in the same or in opposite directions.
d
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"Lower ticket prices would lead to more people attending ballgames." This statement is a
A) macroeconomic statement. B) statement assessing the social interest versus the private interest. C) normative statement. D) statement that confuses marginal cost and sunk cost. E) positive statement.
Which of the following best describes what will happen to equilibrium if large numbers of people cancel cable television subscriptions in exchange for subscriptions to on-demand movies and televisions providers like Netflix and Hulu?
a. A change in tastes away from cable television causes a leftward shift in the demand curve, a decrease in the equilibrium quantity, and an increase in the equilibrium price. b. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price. c. A change in tastes away from cable television causes a leftward shift in the demand curve, an increase in the equilibrium quantity, and a decrease in the equilibrium price. d. A change in tastes away from cable television causes a rightward shift in the demand curve, a decrease in the equilibrium quantity, and a decrease in the equilibrium price.
A burger bought by Joey from a restaurant is non-rival in consumption
a. True b. False Indicate whether the statement is true or false
Suppose that Jane enjoys Diet Coke so much that she consumes one can every day. Although she enjoys gourmet cheese, she consumes it sporadically. If the price of Diet Coke rises, Jane decreases her consumption by only a very small amount. But if the price of gourmet cheese rises, Jane decreases her consumption by a lot. These examples illustrate the importance of
a. the availability of close substitutes in determining the price elasticity of demand. b. a necessity versus a luxury in determining the price elasticity of demand. c. the definition of a market in determining the price elasticity of demand. d. the time horizon in determining the price elasticity of demand.