The net change in quantity demanded of a good following a price change
a. is equivalent to the substitution effect
b. is equivalent to the income effect
c. must decrease as marginal utility rises
d. is negative only when the income effect is negative
e. reflects both the substitution and income effects
E
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The price system
A) is the voluntary exchange system used in the United States. B) is old fashioned and is no longer used. C) is used only in countries that are developing. D) is used to set resource prices only.
Which of the following most directly reflects the law of diminishing marginal utility?
a. After watching two football games, Terry decides to watch a third game. b. A sports fan enjoys watching Monday night football rather than going to the theater. c. After listening to three compact discs, Kim decides to go bowling rather than listen to a fourth disc. d. A musician receives the biggest ovation of the evening after playing the final number of a recital.
Money supply is to income as
a. real is to ideal. b. stock is to flow. c. real is to nominal. d. flow is to stock.
The income effect of higher wages leads workers to want to work more.
Answer the following statement true (T) or false (F)