Cindy Consumes Goods X and Y

question 50

Multiple Choice

Cindy consumes goods x and y. Her demand for x is given by x(p_x, m) = 0.04m -4.24p_x. Now her income is $322, the price of x is $2, and the price of y is $1. If the price of x rises to $3 and if we denote the income effect on her demand for x by DI and the substitution effect on her demand for x by DS, then

• A) DI = 0 and DS = -2.00.
• B) DI = -0.18 and DS = -0.52.
• C) DI = -0.52 and DS = -0.52.
• D) DI = -0.18 and DS = -4.06.
• E) None of the above.

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Definitions:

American Parents

Refers to parents living in the United States, encompassing a wide range of parenting styles, values, and cultural practices.

Intelligence

The ability to learn from experience, solve problems, and use knowledge to adapt to new situations.

Social Skills

Abilities necessary to interact and communicate effectively with others, including listening, understanding social cues, and responding appropriately.

Autonomous Morality

A stage in moral development where individuals begin to understand and apply their own principles of justice and rights, independent of authority figures.