For a normal good, does the income effect reinforce the substitution effect or does it partly offset the substitution effect?
What will be an ideal response?
For a normal good the substitution effect and the income effect reinforce each other, and a decrease (increase) in the price of a good will always result in an increase (decrease) in the quantity of the good demanded.
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Refer to Table 7-1. Use the table above to select the statement that accurately interprets the data in the table
A) Rob has a comparative advantage in picking berries. B) Bill has a comparative advantage in catching fish. C) Rob has a comparative advantage in catching fish and picking berries. D) Bill has a comparative advantage in picking berries.
Answer the following statements true (T) or false (F)
1. Labor includes the physical efforts of individuals and groups, but not their mental efforts. 2. Functional distribution has to do with the allocation of total production among the resources. 3. Goods used to produce other goods and services are known as capital. 4. All economies in the world have identical methods of functional distribution.
In the above figure, the Nash product is
A) 20. B) 40. C) 100. D) 400.
A barter economy is one in which
a. money serves as a medium of exchange. b. only precious metals are accepted as money. c. goods are traded directly for other goods. d. paper money is backed by gold.