Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are normal goods and that the price of good X increases. Then, which of the following effect is known with certainty.
Subject: Managerial Economics Multiple Choice Quiz ( MCQ ) and Answer
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that both X and Y are inferior goods and the price of good Y increases. Then the substitution effect will lead consumers to consume
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume that X is a normal good, Y is an inferior good and the price of good X increases. Then the substitution effect will lead consumers to consume
Suppose that consumers’ preferences are well behaved in that properties 4-1-4-4 are satisfied. Furthermore, assume goods X and Y are normal goods and the price of good X decreases. Then the substitution effect will lead consumers to consume
When the price of one good decreases, the associated substitution effect is represented by a
When the price of one good increases, the associated income effect is represented by a move from one indifference curve to a
Consider a two good world, with commodities X and Y. If X is an inferior good, then an increase in consumer income cannot
Sam Voter prefers Jack to Rob, Rob to Mark, and Jack to Mark. Sam’s preferences
Given that income is $300, the price of good Y is $15, and the price of good X is $20. What is the vertical intercept of the budget line?
The maximum quantity of good Y that is affordable is:
Suppose earnings are given by E = $50 + $20(24 – L), where E is earnings and L is the hours of leisure. What is the price to the worker of consuming an additional hour of leisure?
The total earnings of a worker are represented by E = 150 + $12(24 – L), where E is earnings and L is the number of hours of leisure. How much will the worker earn if he takes 16 hours of leisure per day?
A price decrease causes a consumer’s “real” income to:
The substitution affect isolates the change in the consumption of a good caused by:
If the price of good X decreases, what will happen to the budget line?
Given that income is $750 and PX = $32 and PY = $8, what is the market rate of substitution between goods X and Y?
What is the maximum amount of good Y that can be purchased if X and Y are the only two goods available for purchase and PX = $10, PY = $15, X = 30, and M = 600?
A decrease in the price of good Y will have what effect on the budget line on a normal X-Y graph?
The rate at which a consumer is willing to substitute one good for another, while still maintaining a given level of satisfaction is called the
Which combination of the properties given below rules out indifference curves that intersect one another?
The difference between a price increase and a decrease in income is that
If money income doubles and the prices of all goods triples, then the