Suppose hamburger is an inferior good, but not a Giffen good, for Bob. If the price of hamburgers increases,
A) the income effect is greater than the substitution effect.
B) the income effect is smaller than the substitution effect.
C) consumption of hamburger will increase.
D) We are unable to judge the change of hamburger consumption.
B
You might also like to view...
The ________ plots the relationship between prices and the quantity producers are willing to sell
A) isoquant B) indifference curve C) demand curve D) supply curve
The nominal interest rate minus the real interest rate approximately equals the
A) rate of increase in the amount of investment. B) inflation rate. C) rate of increase in the income. D) rate the bank receives to cover lending costs.
In one of the earliest studies on the link between interest rates and money demand using United States data, James Tobin concluded that the demand for money is
A) sensitive to interest rates. B) not sensitive to interest rates. C) not sensitive to changes in income. D) not sensitive to changes in bond values.
Additions to inventory are
A) not counted as an expenditure in GDP accounting. B) counted as an intermediate input. C) counted as a component of investment spending. D) subtracted from sales revenue in calculating profit income.