This topic contains a solution. Click here to go to the answer

Author Question: Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed ... (Read 39 times)

SO00

  • Hero Member
  • *****
  • Posts: 568
Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
 a. a substitution effect and an income effect in opposite directions.
  b. a substitution effect and an income effect in the same direction.
  c. a substitution effect but no income effect.
  d. an income effect but no substitution effect.

Question 2

If products similar to the intermediate good are sold, an approximation to the correct transfer price is
 a. average costs
  b. average fixed costs
  c. average variable costs
  d. the market price



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

ktidd

  • Sr. Member
  • ****
  • Posts: 319
Answer to Question 1

d

Answer to Question 2

d





 

Did you know?

A recent study has found that following a diet rich in berries may slow down the aging process of the brain. This diet apparently helps to keep dopamine levels much higher than are seen in normal individuals who do not eat berries as a regular part of their diet as they enter their later years.

Did you know?

On average, the stomach produces 2 L of hydrochloric acid per day.

Did you know?

Ether was used widely for surgeries but became less popular because of its flammability and its tendency to cause vomiting. In England, it was quickly replaced by chloroform, but this agent caused many deaths and lost popularity.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Did you know?

Asthma attacks and symptoms usually get started by specific triggers (such as viruses, allergies, gases, and air particles). You should talk to your doctor about these triggers and find ways to avoid or get rid of them.

For a complete list of videos, visit our video library