Assume Sally is initially in equilibrium and that X and Y are normal goods for her. Then the price of X rises. For Sally to move to a new equilibrium point, her consumption of
A. X must increase.
B. X must remain constant, but her consumption of Y must increase.
C. both X and Y must increase.
D. X must decrease.
Answer: D
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Suppose Sam plans to buy only popcorn and soda. He has $40 to spend per week. A change in which of the following variables will change Sam's consumption possibilities? I. price of popcorn II. income III. preferences IV. utility
A) II only B) I and II C) I, II and III D) III and IV
Papa Ray owns a pizzeria. He is more efficient at making pizza than anyone he could hire. Does this mean that he should make all of the pizzas himself?
What will be an ideal response?
Is it possible to proactively prevent armed conflict in developing countries?
What will be an ideal response?
A Giffen good has
A) a positive substitution effect. B) a negative income effect. C) a larger income effect than substitution effect. D) All of the above.