Econ_11_Prac_Quiz_3 - Practice Quiz 3 Econ 11...

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Practice Quiz 3 1 Econ 11 Microeconomics Practice Quiz 3 V-1 1.If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g., coffee and cream for a coffee drinker who never varies the amount of cream used in each cup), then a. there is no substitution effect from a change in the price of coffee b. there is no income effect from a change in the price of coffee c. Giffen's Paradox must occur if both coffee and cream are inferior goods d. an increase in income will not affect cream purchases V-2 2. Assume x and y are the only two goods a person consumes. If after a rise in p X the quantity demanded of y increases, one could say or income effect dominates
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