Neville, in Problem 2, Has a Friend Named Oswald

question 3

Multiple Choice

Neville, in Problem 2, has a friend named Oswald. Oswald has the same demand function for claret as Neville, namely q = .02m - 2p, where m is income and p is price. Oswald's income is $5,500 and he initially had to pay a price of $40 per bottle of claret. The price of claret rose to $70. The substitution effect of the price change

• A) reduced his demand by 42.
• B) reduced his demand by 60.
• C) increased his demand by 60.
• D) reduced his demand by 78.
• E) reduced his demand by 52.

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Definitions:

Blood Calcium

Refers to the level of calcium in the blood, which is crucial for various physiological functions including bone health, muscle contractions, and blood clotting.

Osteoblasts

Bone-forming cells that turn membrane into bone. They use excess blood calcium to build new bone.

Calcitonin

A hormone secreted by the thyroid gland that helps regulate calcium levels in the blood by inhibiting bone resorption.

Excess Blood

A condition where there is more blood in the body or a part of the body than what is considered normal or healthy.