Answer to Question 1
Ceteris paribus, the income effect of a price decrease increases the opportunity to buy more of all goods, whereas the substitution effect of a price decrease makes the good become relatively cheaper. In the case of a price increase, the income effect reduces the opportunity to buy all goods, whereas the substitution effect makes the good become relatively more expensive.
Answer to Question 2
The firm should continue to produce in the short run but exit in the long-run if it expects economic losses to continue.
Effect of a Black Hole’s Tidal Force on Infalling Matter
Thorndike’s Puzzle Box and the Law of Effect (1 of 2)
Relationship between Income Inequality and the Desired Tax Rate
The Composition Effect
Position effect, as illustrated in the eye phenotype in two female Drosophila
For the circuit in Figure 1, assume ideal diodes. The peak inverse voltage is approximately