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Author Question: Explain the income effect and the substitution effects of a price change for a normal good. What ... (Read 111 times)

plus1

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on: Jun 29, 2018
Explain the income effect and the substitution effects of a price change for a normal good.
 
  What will be an ideal response?

Question 2

The way in which a corporation is structured and the impact a corporation's structure has on the firm's behavior is referred to as
 
  A) structural behavior. B) corporate governance.
  C) structure composition theory. D) corporate taxation.
InMicro ¦ Hubbard, O'Brien ¦ 1st Edition
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spencer.martell

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Reply #1 on: Jun 29, 2018
Answer to Question 1

For normal goods, the income and substitution effects work in the same direction. Higher prices lead to a lower quantity demanded, and lower prices lead to a higher quantity demanded.

Answer to Question 2

B


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