The Demand Curve for Canned Peas Is Downward Sloping

question 88

Multiple Choice

The demand curve for canned peas is downward sloping.If the price of canned peas, an inferior good, rises, then

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

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Definitions:

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Refers to the subject or phenomena under observation or examination in a research setting.

Elton Mayo

An Australian psychologist and organizational theorist best known for his work in the Hawthorne Studies, which examined how various factors in the work environment affected employee productivity and morale.

Bias

A tendency to lean in a certain direction, often to the detriment of an open mind; prejudice in favor of or against one thing, person, or group compared with another.

Theoretical Incoherence

A lack of logical consistency in the framework of a theory, leading to contradictions or an inability to adequately explain phenomena.