Add Question Essay What is the income effect or a price 331 Essay What is the

Add question essay what is the income effect or a

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Add Question Essay: What is the income effect or a price ... 331. Essay: What is the income effect or a price ... Points: 0 Extra Credit Full Credit Add Question Question What is the income effect or a price change? Answer The income effect is a change in quantity demanded that comes about as a result of a change in purchasing power due to a change in price. When the price of some regularly purchased good rises, consumers are left with less money to spend buying goods of all sorts. The rise in price, therefore, effectively reduces the purchasing power of consumers, resulting in a drop in demand for most normal goods, often including the good whose price has risen. Note that when the price of a product rises, quantity demanded for it will typically fall, partially because of the income effect, and partially because of the substitution effect. Indifference curve analysis helps us determine how much of this drop in quantity demanded is because of the income effect versus the substitution effect. Add Question Essay: What is the substitution effect of a ... 332. Essay: What is the substitution effect of a ...
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Points: 0 Extra Credit Full Credit Add Question Question What is the substitution effect of a price change? Answer When the price of some good rises, quantity demanded for the good will typically fall as consumers begin purchasing less expensive substitute products; this is the substitution effect. Note that when the price of a product rises, quantity demanded for it will typically fall, partially because of the income effect, and partially because of the substitution effect. Indifference curve analysis helps us determine how much of this drop in quantity demanded is due to the income effect versus the substitution effect. Add Question Multiple Choice: When a consumer chooses among a set o... 333. Multiple Choice: When a consumer chooses among a set o... Points: 0 Extra Credit Full Credit Add Question Question When a consumer chooses among a set of goods or services, utility is maximized when marginal utility: Answer equals total utility. is minimized. per dollar spent is equal for all goods. is greater than total utility. Add Question True/False: When deciding whether to buy a new ca... 334. True/False: When deciding whether to buy a new ca...
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Points: 0 Extra Credit Full Credit Add Question Question When deciding whether to buy a new car or repair an old car, it is as important to consider both how much has already been spent on the old car and the likely future costs of repairs to the old car. Answer True False Add Question True/False: When deciding whether to buy a new ca... 335. True/False: When deciding whether to buy a new ca... Points: 0 Extra Credit Full Credit Add Question Question When deciding whether to buy a new car or repair an old car, it is not wise to dwell on how much has already been spent on the old car, but instead to consider how much is likely to be spent on future repairs to the old car.
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