Hamburger Is an Inferior Good

question 91

Multiple Choice

Hamburger is an inferior good.If the price of hamburger increases,

• A)the income effect on the demand for hamburger will reinforce the substitution effect
• B)the income effect on the supply of hamburger will reinforce the substitution effect
• C)the budget line will rotate outward
• D)the budget line will shift outwards
• E)the income effect on the demand for hamburger will offset,to some degree,the substitution effect

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Definitions:

Municipal Bond

A debt security issued by a state, municipality, or county to finance its capital expenditures, often tax-exempt for investors.

Marginal Tax Bracket

The tax rate that applies to the next dollar of taxable income, indicating the percentage of tax paid on the last dollar earned.

Taxable Yield

The yield on an investment before the effects of taxes are taken into account, relevant for investors in taxable accounts.

Futures Contract

Standardized legal agreements to buy or sell a specific commodity or financial instrument at a predetermined price at a specified time in the future.