Refer to Figure 6.1. Assume that L1 represents the budget line before a price change. The substitution effect is shown by the movement:
A. from bundle A to bundle C.
B. from bundle A to bundle B.
C. from bundle B to bundle C.
D. from bundle C to bundle B.
A. from bundle A to bundle C.
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When the United States exports a good, the amount of the ________ in U.S. consumer surplus is ________ the amount of the ________ in U.S. producer surplus
A) increase; smaller than; increase B) increase; larger than; decrease C) decrease; smaller than; increase D) decrease; equal to; decrease
Which of the followings does NOT shift the short-run aggregate supply curve?
A) supply shocks. B) persistent positive output gap. C) changes in expected inflation. D) an increase in output gap.
Which of the following constitutes an external cost of driving an automobile?
A) insurance B) fuel C) pollution D) wear and tear
An increase in output will tend to
a. increase productivity in the economy as a whole b. reduce prices of non-labor inputs and other commodities in limited supply in the short run c. increase real wage rates d. increase nominal wage rates e. decrease the price level