0 i thetotaleffectindemandforgoodyisachangefromdtoc ii

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Unformatted text preview: atements: [Pen. 1] (i) The income effect is always zero with all perfect complements (ii) The Hicks Decomposition shows a decrease in the price of Good X (iii) The Hicks Decomposition shows an increase in the price of Good X (iv) The Compensated Budget Line is BG (v) The Compensated Budget Line is AH Which of the following combinations are true? A. B. C. D. E. (i), (ii) & (iv) (i), (ii) & (v) (ii) & (iv) (ii) & (v) Abstain 5 6. Consider the following statements: [Pen. 0] (i) The total effect in demand for good Y is a change from D to C. (ii) The total effect in demand for good X is a change from E to F. (iii) The total effect in demand for good X is a change from F to E. (iv) The income effect in terms of good X is a movement from E to F & the substitution effect is zero. (v) The income effect is in terms of good X is a movement from F to E & the substitution effect is zero Which of the following combinations are true? A. B. C. D. E. (i), (ii) and (v) (i), (iii) and (v) (i), (ii) and (iv) (i), (iii) and (iv) Abstain 7. Which of the fo...
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This note was uploaded on 05/23/2011 for the course ECON 203 taught by Professor Jules during the Spring '11 term at University of Cape Town.

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