Maude Thinks Delphiniums and Hollyhocks Are Perfect Substitutes, One for One

question 28

Multiple Choice

Maude thinks delphiniums and hollyhocks are perfect substitutes, one for one. If delphiniums currently cost $5 per unit and hollyhocks cost $6 per unit and if the price of delphiniums rises to $8 per unit,

• A) the income effect of the change in demand for delphiniums will be bigger than the substitution effect.
• B) there will be no change in the demand for hollyhocks.
• C) the entire change in demand for delphiniums will be due to the substitution effect.
• D) of the change will be due to the income effect.
• E) of the change will be due to the income effect

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Definitions:

Philosophical Text

Written works that explore fundamental questions regarding existence, ethics, knowledge, reason, and the mind.

Rig-Veda

An ancient Indian collection of Vedic Sanskrit hymns, one of the four sacred texts (śruti) of Hinduism.

Upanishads

Ancient Indian texts that form the philosophical basis of Hindu religion, focusing on spiritual enlightenment and the nature of reality.

Reality

The state of things as they actually exist, as opposed to how they may appear or might be imagined.