Author Question: Your indifference curves for good X (horizontal axis) and good Y (vertical axis) are vertical lines ... (Read 407 times)

NClaborn · **on:** Jul 1, 2018

Your indifference curves for good X (horizontal axis) and good Y (vertical axis) are vertical lines because you do not gain any satisfaction from consumption of Y.

As the price of X declines, the change in consumption of X is entirely composed of the: A) income effect.
B) substitution effect.
C) Giffen effect.
D) independent good effect.

Question 2

A demand curve of the form: Q = a - bP, where a and b are positive real numbers,:

A) is an upward sloping straight line.
B) has a constant price elasticity of demand.
C) is a downward sloping straight line.
D) is a parabolic curve.