Sam Has $200 a Month to Spend on Either Tanning

question 27

Multiple Choice

Sam has $200 a month to spend on either tanning sessions or rounds of golf.Tanning sessions are $20 each,and a round of golf is $40.Sam currently consumes six tanning sessions and two rounds of golf.Both tanning and golf are normal goods.If the price of a round of golf drops to $20,the income and substitution effects will cause Sam's consumption of tanning sessions:

• A) to increase, since both effects predict an increase.
• B) to decrease, since both effects predict a decrease.
• C) to change, but the direction is dependent upon which effect is stronger.
• D) It is impossible to say what will happen without more information.

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Definitions:

Activators

Proteins that bind to specific DNA sites to increase the likelihood of transcription of a particular gene.

Transcription

The act of transferring the encoded information from a DNA strand into a novel molecule of messenger RNA (mRNA).

RNA Interference

Mechanism in which RNA molecules interfere with gene expression by preventing translation of specific mRNAs.

RNA Processing And Transport

The series of modifications RNA molecules undergo after transcription, including splicing, editing, and transport out of the nucleus to the cytoplasm for translation.