Bag of chips and bottles of salsa are perfect complements for consumer who eats only chips and salsa, but a bottle of salsa costs $1 more than a bag of chips. The income effect of a 50 cent increase in the price of a bag of chips will be fore the consumer to eat fewer chips and less salsa.

Answer the following statement true (T) or false (F)


True

Rationale: When two goods are perfect complements (in a 2-good model), both are normal goods.

Economics

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A consumer's total utility is maximized when the total utility per dollar from all goods is equalized

Indicate whether the statement is true or false

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The best way to address differences in labor and environmental standards is through trade barriers

Indicate whether the statement is true or false

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Having a well-known brand name associated with high quality is

A. is a value to consumers. B. can take a long time to establish. C. can be costly to maintain. D. All of these statements are true.

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Demand is said to have unit elasticity if the price elasticity of demand is

a. less than 1. b. greater than 1. c. equal to 1. d. equal to 0.

Economics