The substitution effect
A) is always larger than the price effect.
B) always decreases purchases of a good as the price of a good rises.
C) increases purchases of the good as the price rises if the good is a normal good.
D) is always smaller than the income effect.
B
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The largest component of M2 is
A) savings deposits. B) currency. C) money market mutual funds. D) travelers checks.
An industry has 1000 competitive firms, each producing 50 tons of output. At the current market price of $10, half of the firms have a short-run supply curve with a slope of 1; the other half each have a short-run supply curve with slope 2
The short-run elasticity of market supply is A) 1/50 B) 3/10 C) 1/5 D) 2/5 E) none of the above
For some investment projects, typically large-scale and long-term, such as housing construction or expansion of automobile assembly lines,
a. the interest rate has no influence on the investment decisions b. investment decisions depend directly on saving by firms in those industries c. slight changes in the interest rate rarely affect decisions d. interest charges are an important cost factor e. autonomous investment varies according to production quotas
If unskilled domestic labor and unskilled immigrant labor are substitutes in the production process, then a more open immigration policy will likely result in all but which of the following?
A. The wage received by unskilled native workers decreases. B. The demand curve for unskilled labor shifts up (out). C. The total market supply of unskilled labor shifts out. D. The market-clearing wage for unskilled labor decreases. E. Total employment of unskilled labor increases.