« previous next »

Author Question: What are the two effects that explain the law of demand? Briefly explain each effect. What will ... (Read 98 times)

Medesa

  • Hero Member
  • *****
  • Posts: 507
on: Jun 29, 2018
What are the two effects that explain the law of demand? Briefly explain each effect.
 
  What will be an ideal response?

Question 2

On average, people in the United States spend a greater percentage of their income on health care than do people in most other countries.
 
  Indicate whether the statement is true or false
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
Buy Test-Bank


Ahnyah

  • Sr. Member
  • ****
  • Posts: 336
Reply #1 on: Jun 29, 2018
Answer to Question 1

The two effects that explain the law of demand are the income effect and the substitution effect. The income effect is the change in quantity demanded of a good that results from a change in purchasing power due to a change in the good's price. The substitution effect is the change in quantity demanded of a good that results from the effect of a change in the good's price making the good more or less expensive relative to other goods that are substitutes.

Answer to Question 2

TRUE


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Symptoms of kidney problems include a loss of appetite, back pain (which may be sudden and intense), chills, abdominal pain, fluid retention, nausea, the urge to urinate, vomiting, and fever.

Did you know?

Pregnant women usually experience a heightened sense of smell beginning late in the first trimester. Some experts call this the body's way of protecting a pregnant woman from foods that are unsafe for the fetus.

Did you know?

The oldest recorded age was 122. Madame Jeanne Calment was born in France in 1875 and died in 1997. She was a vegetarian and loved olive oil, port wine, and chocolate.

Did you know?

The most common childhood diseases include croup, chickenpox, ear infections, flu, pneumonia, ringworm, respiratory syncytial virus, scabies, head lice, and asthma.

Did you know?

Patients who have been on total parenteral nutrition for more than a few days may need to have foods gradually reintroduced to give the digestive tract time to start working again.

Effect of pH on drug absorption: (a) a weak acid such as aspirin (ASA) is in a nonionized form in an Effect of pH on drug absorption: (a) a weak acid such as aspirin (ASA) is in a nonionized form in an
Effect of Perceived Price of a Drug on Placebo Analgesia Effect of Perceived Price of a Drug on Placebo Analgesia
Effect of RYGB Surgery in Rats Effect of RYGB Surgery in Rats
Historian James Merrell notes several errors in Benjamin West’s famous 1771 painting, William Penn’s Historian James Merrell notes several errors in Benjamin West’s famous 1771 painting, William Penn’s
Effect of a Tax Effect of a Tax
Regulatory effects of the vascular endothelium in normal and pathologic states Regulatory effects of the vascular endothelium in normal and pathologic states
Video: Introduction to Eating Disorders

For a complete list of videos, visit our video library