Which of the following examples identifies the income effect of a price change?
A) When Gary's income doubles his wine consumption doubles, the price of wine remaining unchanged.
B) When the price of diesel falls, consumers start purchasing more petroleum-powered vehicles.
C) While purchasing shirts and jeans, when the price of a pair of jeans falls, Jack purchases more of both jeans and shirts.
D) While purchasing pens and pencils, when the price of pens falls, Jill purchases more pens and fewer pencils.
C
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Teenagers drink more soda than other age groups. If the number of teenagers increases, everything else remaining the same,
A) market demand for soda does not change. B) market demand for soda increases. C) there is a movement along the market demand curve for soda. D) market demand for soda decreases. E) None of the above answers is correct because the effect on the demand depends whether the supply curve shifts rightward, leftward, or not at all.
The joining of firms that are producing or selling a similar product is known as
A) a conglomerate merger. B) a horizontal merger. C) a vertical merger. D) economies to scale.
The Golden Age of fiscal policy was during _____
a. the 1920s b. World War II c. the Eisenhower years d. the 1960s e. the Reagan administration years
The "brain drain" problem in the DVCs refers to the fact the best-educated workers:
A. are reluctant to become entrepreneurs. B. are concentrated in rural areas where their skills are underutilized. C. often immigrate to industrialized countries. D. are reluctant to work in the public sector.