Examlex

Solved

A Consumer's Bundle Includes Good X and Good Y

question 141

Essay

A consumer's bundle includes good X and good Y. Determine whether the following statements are true, false, or uncertain.
a. If good X is a normal good and its price rises, the consumer will buy more of it.
b. If good X is an inferior good and its price rises, the consumer will buy less of it.
c. If good X is a Giffen good and its price falls, the consumer will buy less of it.


Definitions:

Time-value of Money

The concept that money available at the present time is worth more than the same amount in the future due to its earning capacity.

Month-end Payments

Payments that are due or processed at the end of each month.

Compounded Semi-annually

A method of calculating interest in which the interest is added to the principal sum twice a year.

Savings

Money that is set aside or stored for future use or emergencies, rather than spent immediately.

Related Questions