Consuming one more of a good increases its marginal-utility-to-price ratio, and consuming one less of the other good lowers its marginal-utility-to-price ratio
Indicate whether the statement is true or false
F
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Explain the concept of a self-fulfilling prophecy
What will be an ideal response?
Regulators often adopt policies that benefit
A) consumers and injure producers. B) the firms regulated rather than consumers. C) only the government. D) no one.
Which one of the following changes is consistent with a change in an economy's consumption function from C = $500 billion + 0.80Y to C = $700 billion + 0.80Y?
a. An increase in disposable income taxes. b. An increase in interest rates c. A decrease in permanent disposable income. d. An increase in wealth. e. An increase in savings.
Good X is a Giffen good. When the price of X increases, the consumer will consume
a. more X. b. the same amount of X. c. less X. d. more or less X depending on the size of the income effect relative to the size of the substitution effect.