Suppose That Consumers' Preferences Are Well Behaved in That Properties

question 7

Multiple Choice

Suppose that consumers' preferences are well behaved in that properties 4-1 - 4-4 are satisfied.Furthermore, assume that X is a normal good, Y is an inferior good and that the price of good Y increases.Then, which of the following effect is known with certainty.

• A)the income and substitution effect reinforce one another leading to an overall decrease in the consumption of good X.
• B)the income and substitution effect will reinforce one another leading to an overall increase in the consumption of good Y.
• C)the income and substitution effect will reinforce one another leading to an overall increase in the consumption of good X.
• D)the income and substitution effect will have competing effects leading to an indeterminate impact on the consumption of good Y.

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Definitions:

Crisis Leadership

The capability of leading and managing an organization before, during, and after a crisis in a way that minimizes damage and enables it to recover quickly.

Disaster Planning

The process of creating procedures and measures to prepare, respond to, and recover from emergency situations or natural calamities.

Transactional Leader

A leadership style focused on the exchange process between leader and followers, where performance is rewarded and not meeting standards is punished.

Path-Goal Theory

A leadership theory that emphasizes the leader's role in clarifying paths to goals and removing obstacles to performance.