The income effect occurs when an individual switches to another similar good when the price of the preferred good increases
a. True
b. False
Indicate whether the statement is true or false
False
You might also like to view...
Larger quantities of any good will be supplied at higher prices because
a. consumers will be more satisfied b. higher prices attract resources from other uses c. people are naturally lazy and have to be bribed to give up their leisure d. price and quantity supplied are inversely related e. of the law of decreasing opportunity cost
Some policies toward externalities provide incentives so that private decision makers will choose to solve the problem on their own. What name do we use for these types of policies?
The field of macroeconomics developed when economists looked for causes of:
A. poverty and inflation. B. World War I. C. the Great Depression. D. the wealth of nations.
According to the text, which of the following statements is true?
A. The price elasticity of Honda Accords exceeds the price elasticity of demand for BMWs. B. The price elasticity of BMWs exceeds the price elasticity of demand for Honda Accords. C. The cross-price elasticity of demand for Hondas and BMWs is relatively large. D. The income elasticity of demand for BMWs is negative.