If an Individual Buys Only Two Goods and These Must

question 29

Multiple Choice

If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g.,coffee and cream for a coffee drinker who never varies the amount of cream used in each cup) ,then

• A)there is no substitution effect from a change in the price of coffee.
• B)there is no income effect from a change in the price of coffee.
• C)Giffen's Paradox must occur if both coffee and cream are inferior goods.
• D)an increase in income will not affect cream purchases.

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Definitions:

Data Manipulation

Data manipulation involves altering, organizing, or analyzing data to better understand, utilize, or present it, often using software tools or programming languages.

Logical Interpretation

The process of analyzing statements, propositions, or concepts to deduce rational, consistent meanings or conclusions.

Conclusion

The final part of a document or speech that summarizes the main points or findings and provides a closing thought.

Information Unique

Data or facts that are distinctive, novel, or not widely known by the public.