Author Question: Use the following two statements in answering this question: I. For all Giffen goods the ... (Read 52 times)

audragclark · **on:** Jul 1, 2018

Use the following two statements in answering this question: I. For all Giffen goods the substitution effect is larger than the income effect. II. For all inferior goods the substitution effect is larger than the income effect.

A) I and II are true.
B) I is true, and II is false.
C) I is false, and II is true.
D) I and II are false.

Question 2

Given that MEC(q) = 2q2, what can be inferred about the total cost of pollution as output increases?

A) The total cost of pollution is increasing.
B) The total cost of pollution is positive.
C) The total cost of pollution is growing at a positive rate.
D) The total cost of pollution is growing at an increasing rate.
E) The total cost of pollution is changing.