Suppose a Consumer Can Purchase Only Two Goods,beef and Chicken

question 24

Multiple Choice

Suppose a consumer can purchase only two goods,beef and chicken.If the price of beef falls (with all other variables held constant) ,and the consumption of chicken increases,we can conclude that the increased consumption of chicken is due to

• A)neither the income effect nor the substitution effect.
• B)both the income effect and the substitution effect.
• C)the income effect only.
• D)the substitution effect only.
• E)a change in the consumer's preference toward chicken.

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Definitions:

Analysis Period

A specific time frame over which economic or financial performance is examined.

Horizontal Analysis

Financial analysis technique that compares account values reported on financial statements over two or more periods to identify trends and growth patterns.

Intra-company Analysis

The examination and comparison of financial and operational performance within different departments, divisions, or units of the same company.

Base Period

A specific time period used as a reference point for comparing financial or economic data across different periods.