Question

7. If the price of a normal good rises, consumers would _______ the consumption of the good by the substitution effect and ________ the consumption of the good by the income effect. A. Increase; Increase B. Increase; Decrease C. Decrease; Increase D. Decrease; Decrease

62

likes
312 views

Answer to a math question 7. If the price of a normal good rises, consumers would _______ the consumption of the good by the substitution effect and ________ the consumption of the good by the income effect. A. Increase; Increase B. Increase; Decrease C. Decrease; Increase D. Decrease; Decrease

Expert avatar
Jon
4.6
110 Answers
When the price of a normal good rises, the substitution effect leads consumers to buy less of the now relatively more expensive good and more of other goods.
The income effect comes from the fact that the price increase reduces the consumer's purchasing power, making them feel poorer.
The combination of the substitution effect and the income effect results in a decrease in the consumption of the good.

Therefore, the correct answer is:
C. Decrease; Increase

\textbf{Answer: C. Decrease; Increase}

Frequently asked questions (FAQs)
What is the result of multiplying Vector A with components (3, -4) by Vector B with components (5, 2)?
+
Math Question: Find the square root of 85 rounded to two decimal places.
+
What is the result of multiplying the sum of 25 and 18 by the difference of 42 and 9?
+
New questions in Mathematics
a to the power of 2 minus 16 over a plus 4, what is the result?
-442/c+5=26 what is c?
The patient is prescribed a course of 30 tablets. The tablets are prescribed “1 tablet twice a day”. How many days does a course of medication last?
A circular park has a diameter of 150ft. A circular fence is to be placed on the edge of this park. Calculate the cost of fencing this park if the rate charged is $7 per foot. Use π = 3.14.
Given the vectors: a = (2m – 3n, 4n – m) and b = (2, -3), find the values of m and n that make: a = 5 b.
How many different ways can a psychology student select 5 subjects from a pool of 20 subjects and assign each one to a different experiment?
By direct proof, how can you prove that “The sum of any three consecutive even integers is always a multiple of 6”.
What is 28 marks out of 56 as a percentage
2x+4x=
20% of 3500
Task 1 angel has 3 quarters 3/8 of a tank of gasoline and Miguel 7/8, who has more gasoline? number line on number line
A storage maker price is $2.50 per square feet. Find the price of a custom shed 4 yards long, and 5yards wide and 8 feet tall
How to convert 45 kg into grams
What is the value of f(-3) for the function X squared+5x-8=
Write an expression using compatible numbers that can be used to estimate the quotient 629\86
question 1 Consider a sample space S, and two events A and B such that P(A ∩ B) = 0.2, P(A ∪ B) = 0.6, P(B ∪ ̄A) = 0.8 (a) [0.5 points] Calculate P (A). (b) [0.5 points] Calculate P (B)
64-6x^2>0
f(r) = 1/r+9 find f(x^2) + 1
Paul invites 12 friends to his birthday. He wants to give 15 candies to everyone two. The candies are sold in packs of 25. How many should he buy? packages?
An invoice for €2,880 plus default interest of €48.40 was paid on October 28th. Interest rate 5.5%. When was the bill due?