Refer to the Graph Below

question 60

Multiple Choice

Refer to the graph below. Assume the consumer has an income of $100, the price of X is $2 and the price of Y is $1. According to the graph, the income effect of a decrease in the price of X from $2 to $1 is equal to:

• A)5
• B)30
• C)20
• D)25

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Definitions:

House Un-American Activities Committee

A committee of the U.S. House of Representatives, established in 1938, which conducted investigations into alleged disloyalty and subversive activities by persons or organizations suspected of having Communist ties.

Richard Nixon

The 37th President of the United States, serving from 1969 to 1974, known for his involvement in the Watergate scandal leading to his resignation.

Alger Hiss

A former State Department official who was convicted of perjury in the late 1940s, stemming from allegations of spying for the Soviet Union, leading to a highly publicized trial and contributing to the Red Scare.

White Citizens’ Councils

Organizations in the Southern United States during the mid-20th century that promoted racial segregation and opposed civil rights for African Americans using economic pressures and social intimidation.