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ECON_120_chap_4_test_ans

# ECON_120_chap_4_test_ans - View Attempt...

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View Attempt 1 of 1 Title: Ch 4 Quiz Started: September 20, 2009 7:30 PM Submitted: September 20, 2009 7:45 PM Time spent: 00:14:54 Total score: 3/5 = 60% Total score adjusted by 0.0 Maximum possible score: 5 Done 1. When the price of one of the products you buy increases, your purchasing power decreases. This decrease in purchasing power causes you to buy less of a normal good. The name given to this phenomenon is: Student Response Value Correct Answer Feedback A. The substitution effect. B. The income effect. 100% Correct. An increase in price reduces your real income, and thus you will tend to buy less of all normal goods. This is the income effect. C. The law of diminishing returns. D. The law of supply. Score: 1/1 2. Refer to the figure below. Which graph shows the impact of a decrease in income, assuming that the good in question is a normal good? Student Response Value Correct Answer Feedback A. A B. B 0% INCORRECT. Graph B shows an increase in supply. Income is a determinant of demand.

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ECON_120_chap_4_test_ans - View Attempt...

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