Kisa consumes the same amount of cigarettes each week regardless of her income (assume that her income is sufficiently large such that the quantity is affordable). The Equivalent Variation equals the Compensating Variation
Indicate whether the statement is true or false
True . The difference between the measures lies with the income effect/elasticity. There is no income effect for Kisa therefore the measures will be the same.
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John is a user of WhatsApp Messenger. When he initially started using it, the messenger was not very popular among his friends and John did not spend much time on it
As more and more of John's friends started using the messenger, the messenger's value to John increased substantially. What kind of externality is reflected in this example?
If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is
A) 2000. B) 400. C) 100. D) 20.
A tax that does not change consumers’ behavior creates no
A. economic burden. B. excess burden. C. tax revenue. D. tax incidence.
If Mr. Smith thinks the last dollar spent on shirts yields less satisfaction than the last dollar spent on cola, and Mr. Smith is a utility-maximizing consumer, he should:
A. decrease his spending on cola. B. decrease his spending on cola and increase his spending on shirts. C. increase his spending on shirts. D. increase his spending on cola and decrease his spending on shirts.