Assume That a College Student Purchases Only Ramen Noodles and Textbooks

question 143

Multiple Choice

Assume that a college student purchases only Ramen noodles and textbooks. If Ramen noodles are an inferior good and textbooks are a normal good, then the income effect associated with a decrease in the price of a textbook will result in

• A)a decrease in the consumption of textbooks and a decrease in the consumption of Ramen noodles.
• B)a decrease in the consumption of textbooks and an increase in the consumption of Ramen noodles.
• C)an increase in the consumption of textbooks and an increase in the consumption of Ramen noodles.
• D)an increase in the consumption of textbooks and a decrease in the consumption of Ramen noodles.

---

Definitions:

Environmental Uncertainty

The degree of unpredictability and complexity in an organization's external environment, affecting decision-making and strategic planning.

Complexity

The state or quality of having multiple interrelated parts, leading to difficulty in understanding, analysis, or resolution.

Rate of Change

A measure that describes how quickly or slowly a variable, such as a stock price or technology, changes over a period.

Competitive Advantage

An attribute that allows an organization to outperform its competitors, due to unique resources, capabilities, or positioning.