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Author Question: Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed ... (Read 45 times)

SO00

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on: Jul 1, 2018
Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
 a. a substitution effect and an income effect in opposite directions.
  b. a substitution effect and an income effect in the same direction.
  c. a substitution effect but no income effect.
  d. an income effect but no substitution effect.

Question 2

If products similar to the intermediate good are sold, an approximation to the correct transfer price is
 a. average costs
  b. average fixed costs
  c. average variable costs
  d. the market price


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ktidd

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Reply #1 on: Jul 1, 2018
Answer to Question 1

d

Answer to Question 2

d


SO00

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Reply #2 on: Jul 1, 2018
Correct answers!


ktidd

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Reply #3 on: Jul 1, 2018
Great! Please up vote :D


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