Author Question: Your income response for bicycle riding changes with the amount of income you earn. At low levels of ... (Read 125 times)

yoooooman · **on:** Jul 1, 2018

Your income response for bicycle riding changes with the amount of income you earn. At low levels of income, you view bicycle riding as an inferior good and substitute other types of transportation (e.g., auto travel) as your income rises.

However, you view bicycle riding as a normal good after your income rises above a particular level. What shape does your Engel curve for bicycle riding have? A) Vertical line
B) Horizontal line
C) C-shaped
D) Upward sloping
E) none of the above

Question 2

Refer to Scenario 12.3. What is the monopoly price of this new drink?

A) 0
B) 3
C) 13.50
D) 16.50
E) 27