Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and a $1 soda. When he arrived he discovered that hamburgers were on sale for $1 each, so Steve bought two hamburgers and a soda. Steve's response to the
decrease in the price of hamburgers is best explained by:
A. the substitution effect.
B. the income effect.
C. the price effect.
D. a rightward shift in the demand curve for hamburgers.
Answer: B
You might also like to view...
Suppose the table below describes the demand for a good produced by monopolist.PriceQuantity$101$92$83$74$65$56$47The monopolist's total revenue from selling 3 units is ________, and the monopolist's marginal revenue from selling the 3rd unit is ________.
A. $24; 8 B. $24; 6 C. $28; 8 D. $52; 1
Collective bargaining refers to
A) negotiations between workers and health officials. B) negotiations between management of a company and a labor union. C) farming methods in Marxist states. D) the process of electing union leaders.
Movie theatres offer senior discounts because
a. Seniors have a more elastic demand for movie tickets b. Seniors have lower incomes c. Seniors have a lower opportunity cost of time d. All of the above
Briefly explain the impact of an increase in the price of U.S. oil imports on the country's balance of payments and domestic product and income, assuming floating exchange rates.
What will be an ideal response?