EBK PRINCIPLES OF ECONOMICS
8th Edition
ISBN: 8220103600453
Author: Mankiw
Publisher: CENGAGE L
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Chapter 21, Problem 4CQQ
To determine
The impact of increased income on normal and inferior goods.
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Students have asked these similar questions
Peanut butter and jam can be either substitutes or it can be compliments. Caitlin likes peanut butter and she likes jam, but you do not know if Caitlin regards these products as substitutes or as compliments. Which of the following is true?
A. If the price of peanut butter decreases and the quantity of jam Caitlin demanded increases, then Caitlin regards it as substitutes.
B. If the price of jam increases and the quantity of peanut butter Caitlin demanded increases, then Caitlin regards it as compliments.
C. If the price of peanut butter increases and the quantity of jam Caitlin demanded increases, then Caitlin regards it as substitutes.
D. If the price of jam decreases and the quantity of peanut butter Caitlin demanded decreases, then Caitlin regards it as compliments.
E. If the price of peanut butter increases and the quantity of jam Caitlin demanded stays the same, Caitlin regards it as compliments.
Yakov consumes only cheese and crackers.
Cheese and crackers both be inferior goods for Yakov.
Suppose that cheese is a normal good for Yakov while crackers are an inferior good.
If the price of cheese falls, Yakov's consumption of crackers and his consumption of cheese .
Suppose that tacos and pizza are substitutes, and that soda and pizza are
complements. We would expect an increase in the price of pizza to:
O reduce the demand for both soda and tacos.
reduce the demand for soda and increase the demand for tacos.
increase the demand for both soda and tacos.
O reduce the demand for tacos and increase the demand for sodas.
Chapter 21 Solutions
EBK PRINCIPLES OF ECONOMICS
Ch. 21.1 - Prob. 1QQCh. 21.2 - Prob. 2QQCh. 21.3 - Prob. 3QQCh. 21.4 - Prob. 4QQCh. 21 - Prob. 1CQQCh. 21 - Prob. 2CQQCh. 21 - Prob. 3CQQCh. 21 - Prob. 4CQQCh. 21 - Prob. 5CQQCh. 21 - Prob. 6CQQ
Ch. 21 - Prob. 1QRCh. 21 - Prob. 2QRCh. 21 - Prob. 3QRCh. 21 - Prob. 4QRCh. 21 - Prob. 5QRCh. 21 - Prob. 6QRCh. 21 - Prob. 7QRCh. 21 - Prob. 1PACh. 21 - Prob. 2PACh. 21 - Prob. 3PACh. 21 - Prob. 4PACh. 21 - Prob. 5PACh. 21 - Prob. 6PACh. 21 - Prob. 7PACh. 21 - Prob. 8PACh. 21 - Prob. 9PACh. 21 - Prob. 10PACh. 21 - Prob. 11PACh. 21 - Prob. 12PA
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- If Edna buys more pasta when the price of pastaincreases, we can infer that for Ednaa. pasta is a normal good for which the incomeeffect exceeds the substitution effect.b. pasta is a normal good for which the substitutioneffect exceeds the income effect.c. pasta is an inferior good for which the incomeeffect exceeds the substitution effect.d. pasta is an inferior good for which thesubstitution effect exceeds the income effect.arrow_forward3) For Nour doughnuts and muffins are perfect substitutes. Doughnuts are £4 a box and muffins are £3 a box. The boxes hold equal numbers. Nour has budgeted £48 a month to spend on these sweets. Which of the following is correct? (a) Nour will buy 12 boxes of doughnuts and no muffins per month. (b) Nour will buy 6 boxes of doughnuts and 8 boxes of muffins per month. (c) Nour will buy no doughnuts and 16 boxes of muffins per month . (d) From this information it cannot be determined how many muffins or doughnuts Nour will buy because the marginal utilities for muffins and doughnuts are not given. 4) The supply of sugar is given by Q, = -50 + 1/2 P. Determine the arc price elasticity of supply between Q = 40 and Q = 100. (a) 7/12. (b) 2. (c) 12/7 . (d) 3/28. (e) None of the above.arrow_forward5arrow_forward
- Mr. Max is about to purchase 4 units of good A and 6 units of good B. The price of both A and B is $2. Mr. Max has only $20 to spend. If the marginal utility of the fourth unit of A is 12 and the marginal utility of the sixth unit of B is 12, then: a. he should not buy anything. b. he should buy more of A and less of B. c. he should buy less of A and more of B. d. he should buy A and B in the quantities indicated. e. he should buy more of A and little more than that of B.arrow_forwardIf the consumer is consuming exactly two goods, and she is always spending all of her money, can both of them be inferior goods?arrow_forwardGood X A B IC2 ICG Good Y The rotation of the budget line from red to blue depicts an increase in monetary income. The rotation of the budget line from red to blue depicts a decrease in monetary income. O The rotation of the budget line from red to blue depicts an increase in the price of X. O The rotation of the budget line from red to blue depicts an increase in the price of Y. O The rotation of the budget line from red to blue depicts an decrease in the price of X. O The rotation of the budget line from red to blue depicts an decrease in the price of Y. After the budget line rotates from red to blue, the amount of X consumed will increase. After the budget line rotates from red to blue, the amount of Y consumed will increase. O After the budget line rotates from red to blue, the amount of Y consumed will decrease. O After the budget line rotates from red to blue, the amount of X consumed will decrease. O After the budget line rotates from red to blue, the person will move from A to…arrow_forward
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