Consider a consumer who purchases two goods, X and Y. If the price of good Y falls, then the substitution effect by itself will
a. cause the consumer to buy more of good Y and less of good X.
b. cause the consumer to buy more of good X and less of good Y.
c. not affect the amount of goods X and Y that the consumer buys.
d. result in an upward-sloping demand for good Y if the substitution effect is positive.
a
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The risk adjusted discount rate
A) is the sum of the risk-free rate and the risk premium. B) includes risk in the denominator of the present value calculation. C) includes risk in the numerator of the present value calculation. D) All of the above
__________ and __________ quotation are also referred to as American and European Quotes.
Fill in the blank(s) with the appropriate word(s).
A bowed outward production possibilities curve occurs when
A) opportunity costs are constant. B) resources are not scarce. C) additional units of output of one good necessitate increased reductions in the other good. D) the society is operating on the production possibilities curve.
The impact of higher taxes would be examined by
A. a macroeconomist. B. a microeconomist. C. both a macroeconomist and a microeconomist. D. neither a macroeconomist nor a microeconomist.