Shirley Lessman Is Planning to Launch a Business and Has

question 69

Multiple Choice

Shirley Lessman is planning to launch a business and has been encouraged to start in a business incubator. This will give her access to

• A) bank loans.
• B) free rent.
• C) prepaid insurance.
• D) management counsel.

---

Definitions:

Income Effect

The variation in income for a person or an economy and its impact on the demand for a specific good or service.

Perfect Substitutes

Goods that can serve the same purpose perfectly, where consumers are indifferent between them and will select based on price.

Giffen Good

A product that paradoxically sees an increase in demand as its price increases, violating the basic law of demand due to the income effect overshadowing the substitution effect.

Inferior Good

A type of good whose demand decreases as the income of consumers increases, opposite of a normal good.