The idea that people will substitute cheaper commodities for more expensive commodities is called
A. the marginal effect.
B. the utility effect.
C. the substitution effect.
D. the real-income effect.
Answer: C
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The presence of transactions costs and information costs
A) lowers the cost of funds to borrowers. B) raises the expected return to lenders. C) lowers the expected return to lenders. D) increases the efficiency of the financial system.
The imposition of a per unit tax on a product
A) will cause the supply curve to shift downward and to the right. B) will cause the supply curve to shift upward and to the left. C) will reduce the quantity supplied of the product. D) will encourage producers to increase the quantity supplied of the product.
In the above figure, along which range would total revenue rise by raising prices?
A. between point d and point e B. between point a and point b C. above point a D. between point c and point d
As pollution emissions increase, the added cost of one more unit of emissions goes down.
Answer the following statement true (T) or false (F)