Consider a Consumer Who Purchases Two Goods, X and Y

question 11

Multiple Choice

Consider a consumer who purchases two goods, X and Y. If the price of good Y falls, then the substitution effect by itself will

• A)cause the consumer to buy more of good Y and less of good X.
• B)cause the consumer to buy more of good X and less of good Y.
• C)not affect the amount of goods X and Y that the consumer buys.
• D)result in an upward-sloping demand for good Y if the substitution effect is positive.

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Definitions:

Statistical Inference

The process of drawing conclusions about population parameters based on a sample taken from the population.

Binomial Distribution

A probability distribution that summarizes the likelihood that a value will take one of two independent states under a given number of observations.

Uniform Distribution

A type of probability distribution where all outcomes are equally likely; in a continuous uniform distribution, any value within a specified range is equally likely to occur.

Standard Normal Variable

A random variable that has a normal distribution with a mean of zero and a standard deviation of one.