Beef is a normal good
Explanation: A decrease in price of chicken increases the effective income and it leads to higher consumption of beef which is a normal good.
Mei only consumes beef and chicken. Everything else equal, a decrease in the price of CHICKEN leads to an increase...
QUESTION 7 TE, SE, IE. When the price of good 1 decreases, the following is true (select all that applies; O a If good 1 is a normal good, then the substitution effect leads to increase in consumption of t. 1 poi b. If good 1 is an inferior good, then the substitution effect leads to decrease in consumption of it. O C If good 1 is a normal good, then the income effect leads to decrease in consumption of...
Exercise 1: Decomposing the Total effect of a price change We wume that an individual consumes only two goods, Good 1 and Good 2. 1. We would like to decompose the total effect on quantity consumed of Good 1 and Good 2, following a price decrease for Good 2. Please fill out the following table. Note: Please denote an increase in quantity demanded using the sign + a decrease wing and an ambiguous effect on quantity demanded using the sign...
Eva consumers rice and beans and nothing else. When the price of rise increases with no change in her nominal income or in the price of beans, she buys less beans and less rice. from thin information, we can definitely conclude that: 1. rice is a normal good for EVA 2. Beans are a normal good for Eva 3. rice is an inferior good for EVA 4. Beans are inferior good for Eva
If an 8% decrease in price leads to a 4% increase in the quantity demanded of the good, as a result of the price change, the total revenue for this product will: a) decrease b) increase c) not change d) double If a 12% increase in price leads to a 6% decrease in quantity demanded of the good, as a result of the price change, the total revenue for the product will: a) not change b) decrease c) increase d)...
Everything else remaining unchanged, an increase in the supply of a good will lead to: a fall in price and an increase in consumption of the good. (this is the correct answer) an increase in the cost of production of the good. an increase in the price of the good. a leftward shift of the supply curve. an upward movement along the supply curve (this one is wrong) I found the answer!
(3) Good X is an inferior good if a decrease in income leads to A. an increase in the supply of good X. B. a decrease in the supply of good X. C. an increase in the demand for good X. D. a decrease in the demand for good X. (4) If the cross-price elasticity between good A & B is negative, we know the goods are: A. inferior goods. B. complements. C. inelastic. D. substitutes.
connect Question 10 of 19 10.00 points Everything else equal, which of the following will have a bigger effect on aggregate demand and GDP $100 million reduction in taxes or a $100 million increase in government spending? The increase in gove spending which OOP and income direct we hav e t he decrease in taxes, which must go through consumption to alect GOP The increase in government spending which has shorter lags will have a bigger effect than the decrease...
Kayjah consumes only potato salad and chicken on an income of 60. Her utility function is as follows: K(cp) = c?p3 The price of each chicken, Pc, is $6.00 and each potato salad, Ps, costs &5.00 i. Construct Kayjah's budget constraint and indifference showing the optimal choice. ii. Suppose the price of potato salad falls to $2.50, calculate the new optimal choice. Show the effects of the price change on the diagram. iii. Calculate the substitution and income effect assuming...
A 5 percent increase in income leads to a 5 percent decrease in quantity demanded for a product. This product is a(n) product and demand is inferior; income inelastic normal; income inelastic inferior; unit income elastic normal; unit income elastic O O O
Completed 28 UULUI JU Suppose that an increase in the price of a good leads to an increase in total revenue. Ignoring other factors (like supply at its current price the good must be: O O O O perfectly price-elastic. inferior. price elastic. price-inelastic