If a good is considered a normal good, the demand curve will shift ________ when income increases because ________
A) right; the income and substitution effects move in the same direction.
B) right; the income and substitution effects move in the opposite direction.
C) left; the income and substitution effects move in the same direction.
D) left; the income and substitution effects move in the opposite direction.
A
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Which of the following is not an advantage cost-plus pricing?
A) It leads to profit maximization. B) It could lead to price stability if the industry is made up of identical firms all using the same method of pricing. C) It is an easy method to implement if a firm produces multiple products and has overhead costs that are difficult to allocate to a particular good. D) It is easy to justify price increases when total costs of production increase.
The welfare loss of a tariff equals that of an import quota that leads to the same level of imports
Indicate whether the statement is true or false
Which statement is true?
A. We have had a central bank since 1789. B. We have never had a central bank. C. Our central bank was formed in 1913. D. We did not have a central bank prior to the Federal Reserve.
An insurance company offering a high-deductible plan is an example of:
A. screening. B. signaling. C. statistical discrimination. D. building a reputation.