« previous next »

Author Question: If a consumer is compensated for the income effect that occurs when the price of a good increases, ... (Read 34 times)

Alainaaa8

  • Hero Member
  • *****
  • Posts: 576
on: Jul 1, 2018
If a consumer is compensated for the income effect that occurs when the price of a good increases, then his demand curves can never slope upward.
 
  Indicate whether the statement is true or false

Question 2

The amount of money one would have to take from a consumer to harm her by as much as the price increase is called
 
  A) compensating variation.
  B) structured settlement.
  C) equivalent variation.
  D) consumer surplus.
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


sultansheikh

  • Sr. Member
  • ****
  • Posts: 335
Reply #1 on: Jul 1, 2018
Answer to Question 1

True . The demand curve would only include the substitution effect. Even for Giffen goods, dq/dp is negative holding utility constant.

Answer to Question 2

C


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Sildenafil (Viagra®) has two actions that may be of consequence in patients with heart disease. It can lower the blood pressure, and it can interact with nitrates. It should never be used in patients who are taking nitrates.

Did you know?

Signs of depression include feeling sad most of the time for 2 weeks or longer; loss of interest in things normally enjoyed; lack of energy; sleep and appetite disturbances; weight changes; feelings of hopelessness, helplessness, or worthlessness; an inability to make decisions; and thoughts of death and suicide.

Did you know?

A good example of polar molecules can be understood when trying to make a cake. If water and oil are required, they will not mix together. If you put them into a measuring cup, the oil will rise to the top while the water remains on the bottom.

Did you know?

Many medications that are used to treat infertility are injected subcutaneously. This is easy to do using the anterior abdomen as the site of injection but avoiding the area directly around the belly button.

Did you know?

Acute bronchitis is an inflammation of the breathing tubes (bronchi), which causes increased mucus production and other changes. It is usually caused by bacteria or viruses, can be serious in people who have pulmonary or cardiac diseases, and can lead to pneumonia.

Effect of RYGB Surgery in Rats Effect of RYGB Surgery in Rats
Are good deeds selfish? Are good deeds selfish?
Effect of antidiuretic hormone deficiency. Effect of antidiuretic hormone deficiency.
The First-Pass Effect The First-Pass Effect
An antique painting is purchased in 1980 for $995. The value increases by 3.1% e An antique painting is purchased in 1980 for $995. The value increases by 3.1% e
Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ... Refer to Scenario 3.1. If the price of potato chips is $0.50 and the price of Cola is $4.00, ...
Video: Second Messengers in the Inositol-lipid Signaling Pathway

For a complete list of videos, visit our video library