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Author Question: In the case of a normal good, A) demand curves always slope downward. B) the income effect and ... (Read 66 times)

shenderson6

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on: Jul 1, 2018
In the case of a normal good,
 
  A) demand curves always slope downward.
  B) the income effect and substitution effect are in the same direction.
  C) the Engel curve slopes upward.
  D) All of the above.

Question 2

Suppose Lisa spends all of her money on books and coffee. When the price of coffee decreases, the
 
  A) substitution effect on coffee is positive, and the income effect on coffee is positive.
  B) substitution effect on coffee is ambiguous, and the income effect on coffee is ambiguous.
  C) substitution effect on coffee is positive, and the income effect on coffee is ambiguous.
  D) substitution effect on coffee is ambiguous, and the income effect on coffee is positive.
Microeconomics ¦ Perloff ¦ 8th Edition
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abctaiwan

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Reply #1 on: Jul 1, 2018
Answer to Question 1

D

Answer to Question 2

C


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