When the price of a good falls, the income effect for a normal good implies that people buySelect one:O a. less of that good because they cannot afford to buy all the things they previously bought.O b. more of that good because they can afford to buy more of all the things they previously bought.Oc. less of that good because the relative price of the good has fallen.O d. more of that good because the relative price.of the good has risen.What would happen in the market for prescription drugs if people begin to view over-the-counterremedies as a good substitute for prescription medications?Select one:-O a. There is an upward movement along the demand curve for prescription medications.O b. The demand for prescription medications will decrease.O c. There is a downward movement along the demand curve for prescription medications.O d. Preschiption medications will become an inferior good.

Hi Student, thanks for posting the question. As per the guideline, we are providing answer for the…

When the price of a good falls, the income effect for a nomal good implies that people buy Select one: a. less of that good because they cannot afford to buy all the things they previously bought. Ob. more of that good because they can afford to buy more of all the things they previously bought. O c. less of that good because the relative price of the good has fallen. O d. more of that good because the relative price of the good has risen.

When the price of a good falls, the income effect for a nomal good implies that people buy Select one: a. less of that good because they cannot afford to buy all the things they previously bought. Ob. more of that good because they can afford to buy more of all the things they previously bought. O c. less of that good because the relative price of the good has fallen. O d. more of that good because the relative price of the good has risen.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

See similar textbooks

Similar questions

2. Julian buys plants and flowers every month. Both are normal goods. When the price of flowers fell, Julian purchased fewer plants. Explain what the income effect and substitution effect predict when the price of flowers falls. Which effect was stronger for Julian?
Suppose Daisy is willing to trade 3/4 tart to Maxine for each pie that Maxine makes and sends to Daisy. Which of the following combinations of pies and tarts could Maxine not then consume, assuming Maxine specializes in making pies and Daisy specializes in making tarts? a. 4 pies and 6 tarts b. 6 pies and 5 tarts c. 8 pies and 3 tarts d. 10 pies and 1.5 tarts
Hand written solutions are strictly prohibited
3. As coffee becomes more expensive, Jamal starts drinking tea, therefore quantity demanded for coffee decreases. This is called a. the income effect. b. the change in equilibrium. c. the substitution effect. d. a shift in the demand curve.
Suppose that price of good X rises by 25 % while price of Y rises by 50% and Income rises by 50%. Then which of the following is correct? O Budget line becomes flatter and consumer is able to afford new bundles that were not affordable before. Budget line becomes steeper and consumer is not able to afford some bundles that were affordable before. Budget line becomes flatter and consumer is not able to afford some bundles that were affordable before. Budget line becomes steeper and consumer is able to afford new bundles that were not affordable before.
. Matilda is downloading music and videos from an online site. She is currently buying three music downloads that cost $3 each and two video downloads that also cost $3 each. The table below indicates what she reports as the marginal utility of the last music download and of the last video download in this combination of purchases. Quantity Price per Download MU per download Music downloads 3 $3 60 Video downloads 2 $3 45 As an assignment for her Microeconomics course, Matilda used the marginal utilities that she gave to her 3rd music download and her 2nd video download to complete the Experiment Tally Sheet below. Her available budget was $19.00. Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Downloads of mu (score) from 1 to 100 Price of each $3.00 Money spent on Total Money Total Budget music mu mu/$ music videos mu mu/$ videos Spent Remaining 1st ? ?…
Chapter 7 i 3:06 BO ☐ The substitution effect. Multiple Choice is generally so weak that its effect cannot be predicted. for an increase in the relative price of a good is sometimes positive but sometimes negative. refers to the change in the quantity demanded of a good due to a change in its relative price. measures the change in the quantity of a good demanded brought about by a change in real income associated with a change in the price of the good. 60 Saved SEP 6