Which of the following statements is FALSE?
A) When the relative price of a good falls, the substitution effect always leads the consumer to substitute more of that good for the other good.
B) For a normal good, the income effect reinforces the substitution effect.
C) For an inferior good, the income effect offsets the substitution effect.
D) For an inferior good, the income effect is positive.
D
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Everything else held constant, if a central bank makes an unsterilized ________ of foreign assets, then the domestic money supply will ________ and the domestic currency will appreciate
A) purchase; increase B) purchase; decrease C) sale; increase D) sale; decrease
Suppose that macroeconomic forecasters predict that the economy will be expanding in the near future. How might managers use this information?
What will be an ideal response?
Which of the following government programs are likely to aid the rich more than the poor?
a. food stamps b. school lunch programs c. subsidies for the arts d. public housing subsidies
Because resources are scarce, if society produces more of one commodity, it has to sacrifice some amount of another commodity. The amount sacrificed is
a. a normative problem b. the out-of-pocket cost c. the opportunity cost d. the lost profit e. the total factor productivity