A change in the price of one good cannot leave utility unchanged unless the price change is accompanies by a change in income.
Answer the following statement true (T) or false (F)
False
Rationale: There are several types of counterexamples to this. For instance, it a consumer consumes at a corner solution and the price of the good that is not consumed increases, the consumer's utility is unchanged. Or, if a consumer consumes at an interior solution, an increase in the price of one good could be accompanied by a decrease in the price of the other good such that the consumer's utility remains unchanged.
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The budget line represents a consumer’s preferences for a commodity.
Answer the following statement true (T) or false (F)
The amount of a particular good or service that buyers in a market will purchase at a given price during a specified period is called:
A. quantity demanded. B. quantity supplied. C. demand. D. supply.
Which of the following is true of a price level increase in an economy?
a. When the price level increases, the purchasing power of money increases b. When the price level increases, the purchasing power of money decreases. c. When the price level increases, the purchasing power of money remains unchanged. d. When the price level increases, the purchasing power of money either increases or decreases, depending upon the size of the national debt. e. When the price level increases, the purchasing power of money either increases or decreases, depending upon the level of government expenditures.
Which of the following allows you to provide information about the relationship between two variables?
a. coordinate system. b. pie chart c. bar graph d. time-series graph