The substitution effect
A. is when individuals consume more of one good and less of another.
B. is associated with changes in relative prices.
C. will have no effect if goods are unrelated.
D. all of these answer options are correct.
D. all of these answer options are correct.
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Refer to the above figure. Autonomous consumption is
A) only at point A. B) to the left of point B. C) only at point B. D) to the right of point B.
The payments system is
A) the method of conducting transactions in the economy. B) used by union officials to set salary caps. C) an illegal method of rewarding contracts. D) used by your employer to determine salary increases.
Labor demand depends on the interest rate because
A) household savings depend on the interest rate. B) firms discount future profits. C) of Ricardian equivalence. D) Labor demand actually does not depend on the interest rate.
Trade between two nations can benefit both if each specializes in the good that it can produce at a lower opportunity cost.
a. true b. false