Steve went to his favorite hamburger restaurant with $3, expecting to buy a $2 hamburger and...
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.
Homework Answers
The answer is b- the income effect.
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 the income effect.
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Steve went to his favorite hamburger restaurant with $3,
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Question 1 Not yet answered Marked out of 1.00 P Flag question Price Quantity Refer to the diagram. A decrease in supply is depicted by a Select one a move from point x to point y b. shift from S2 to S1. c. move from point y to point x. d. Shift from S1 to S2. 9w0 NEX e When economists describe "a market," they mean Select one: a. a system that allows buyers and sellers to interact with one...
2. Comparative advantage. Adam and Boris run a cafeteria. Adam can prepare 1 hamburger in 60 seconds if he works in the kitchen and he can serve 1 customer in 50 seconds whern he works at the checkout. Boris can prepare 1 hamburger in 50 seconds and he can serve 1 customer in 40 seconds. Who has the comparative advantage in which activity? How should they specialize? How many hamburgers they can make and how many customers they can serve...
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