CHAPTER 21 - CHAPTER 21 1. Which of the following is...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
CHAPTER 21 1. Which of the following is correct? When the price of normal good Z falls: A) both income and substitution effects cause the consumer to buy more. B) both income and substitution effects cause the consumer to buy less. C) the income effect causes the consumer to buy less, but the substitution effect causes her to buy more. D) the income effect causes the consumer to buy more, but the substitution effect causes her to buy less. 2. The first Pepsi yields Craig 18 units of utility and the second yields him an additional 12 units of utility. His total utility from three Pepsis is 38 units of utility. The marginal utility of the third Pepsi: A) is 26 units of utility. B) is 6 units of utility. C) is 8 units of utility. D) 38 utils. 3. The "substitution effect" indicates that: A) a decline in money income will cause the consumer to buy more inferior goods and fewer superior goods. B) consumer equilibrium can only be achieved when the consumer is buying substitute goods. C) when the price of a product falls, the lower price will induce the consumer to buy
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 10/15/2009 for the course ECON 2302 taught by Professor Parker during the Spring '09 term at University of Texas-Tyler.

Page1 / 3

CHAPTER 21 - CHAPTER 21 1. Which of the following is...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online