The income and substitution effects of a price change occur because:
a. consumer incomes are not constant.
b. consumer substitution rates are not constant.
c. income and substitution effects never occur simultaneously.
d. of diminishing marginal utility and the equimarginal principle.
e. of increasing marginal utility and the equimarginal principle.
d
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Refer to Table 7-6. Prior to trade, what was the opportunity cost to produce 1 belt in Morocco?
A) 1/2 of a sword B) 1 sword C) 1.5 swords D) 2 swords
Explain how deficit spending can benefit future generations
What will be an ideal response?
Suppliers recognize there is a shortage in the market for their product when they notice that
a. the quantity supplied exceeds the quantity demanded. b. the quantity demanded is falling. c. inventories are falling. d. production exceeds new orders for the product. e. government economists announce a shortage exists.
Advocates of discretionary economic policy are most likely to be
A. Keynesians. B. supply-side economists. C. rational expectationists. D. Classical economists.