The Demand Curve for Corn Is Downward Sloping

question 130

Multiple Choice

The demand curve for corn is downward sloping.If the price of corn, an inferior good, falls, then

• A)the income effect which causes you to reduce your corn purchases is smaller than the substitution effect which causes you to increase your corn purchases, resulting in a net increase in quantity demanded.
• B)the income effect which causes you to increase your corn purchases is larger than the substitution effect which causes you to reduce your corn purchases, resulting in a net increase in quantity demanded.
• C)both the income and substitution effects reinforce each other to increase the quantity demanded.
• D)the income and substitution effects offset each other but the price effect of an inferior good leads you to buy less corn.

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Definitions:

Nuisance

That which endangers life or health, gives offense to the senses, violates the laws of decency, or obstructs the reasonable and comfortable use of property.

Invasion

The act of entering a place or area by force, often used in a military context.

Property

Something that is capable of being owned. A right or interest associated with something that gives the owner the ability to exercise dominion over it.

Malicious Prosecution

An intentional tort designed to protect against the wrongful initiation of criminal proceedings.