Luxury brands like designer sunglasses are goods that may exhibit snob effects. Suppose this is true, and the price for a particular brand increases. What happens to the component changes in the quantity demanded?
A) Pure price effect and snob effect are negative
B) Pure price effect and snob effect are positive
C) Pure price effect is positive, snob effect is negative
D) Pure price effect is negative, snob effect is positive
D
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However, this type of bargaining will tend to be limited when:
The multiplier effect is the series of ________ increases in ________ expenditures that result from an initial increase in ________ expenditures
A) autonomous; consumption; induced B) autonomous; investment; induced C) induced; consumption; autonomous D) induced; investment; autonomous
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What will be an ideal response?
The optimal currency area involves a trade-off of reducing transaction costs but the inability to use changes in exchange rates to help ailing regions. If the US, Canada, and Mexico had one single currency (the Peso-Dollar) we would tend to see all of the following EXCEPT:
a. Even more intraregional trade of goods across the three countries. b. Lower transaction costs of trading within North America. c. A greater difficulty in helping Mexico as you can no longer deflate the Mexican peso. d. Less migration of workers across the three countries. e. An elimination of correlated macroeconomic shocks across the countries.