If consumers buy less of a commodity when their incomes rise, this commodity is ( an inferior good , or a normal good ) ? . When the price of this commodity rises, the substitution effect is( negative or postive) and the income effect is ( negative or postive) ? . So the net result for consumption of this commodity ( depends on which effect dominates , is an increase , is a decrease) ? . Q Search this courseProblems & Applications (Ch 21)Back to AssignmentpolsAttempts:Average: /211. Problems and Applications Q11If consumers buy less of a commodity when their incomes rise, this commodity isand the income effect isSo the net result forWhen the price of this commodity rises, the substitution effect isconsumption of this commodity

In the market, the change in the consumers buying decision depends upon two types of price effect, such as income and substitution effect.1. Here, it is given that the relationship between a commodity and income is negative. This will be an inferior good because demand for inferior good decreases with the increase in the income level. 2. When the price of this commodity (inferior good) rises, the substitution effect will be negative because people will make lesser demand for it. And, its income effect will be positive because increased price will reduce the income level that leads to increase the demand for inferior good. 3. Here, substitution effect reduces its demand and income effect increases its demand. Therefore, the actual or net consumption of this commodity depends on which effect dominates.

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If consumers buy less of a commodity when their incomes rise, this commodity is ( an inferior good , or a normal good ) ? . When the price of this commodity rises, the substitution effect is ( negative or postive) and the income effect is ( negative or postive) ? . So the net result for consumption of this commodity ( depends on which effect dominates , is an increase , is a decrease) ? .

If consumers buy less of a commodity when their incomes rise, this commodity is ( an inferior good , or a normal good ) ? . When the price of this commodity rises, the substitution effect is ( negative or postive) and the income effect is ( negative or postive) ? . So the net result for consumption of this commodity ( depends on which effect dominates , is an increase , is a decrease) ? .

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ISBN:9781337613064

Author:Tucker, Irvin B.

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Chapter6: Consumer Choice Theory

Section: Chapter Questions

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Question

If consumers buy less of a commodity when their incomes rise, this commodity is ( an inferior good , or a normal good ) ? .

When the price of this commodity rises, the substitution effect is

( negative or postive) and the income effect is ( negative or postive) ? .

So the net result for consumption of this commodity ( depends on which effect dominates , is an increase , is a decrease) ? .

Q Search this course
Problems & Applications (Ch 21)
Back to Assignment
pols
Attempts:
Average: /2
11. Problems and Applications Q11
If consumers buy less of a commodity when their incomes rise, this commodity is
and the income effect is
So the net result for
When the price of this commodity rises, the substitution effect is
consumption of this commodity

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