Suppose You Are a Government Analyst and You Think Beans

question 71

Multiple Choice

Suppose you are a government analyst and you think beans are particularly nourishing.You decide to subsidize beans in order to encourage people to eat more of them.(By subsidizing an item,consumers pay a lower price. ) After you successfully lower bean prices,you notice that consumption of beans has fallen.What went wrong?

• A)The substitution effect caused people to substitute ramen noodles and rice for beans.
• B)The income effect caused people's real income to fall so they could no longer afford as much food.
• C)The income effect caused people's real income to rise so they purchased less of what they considered to be inferior goods.
• D)Demand for beans is price inelastic.

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Definitions:

Volley Principle

A theory explaining how auditory neurons can produce the perception of sound frequencies higher than their individual firing rates through coordinated action.

Low Frequencies

Refers to sound waves with a frequency below about 200 Hz, often associated with bass sounds in music and acoustics.

Optic Disc

The optic disc is the point on the retina where the optic nerve fibers exit the eye, often referred to as the blind spot since it lacks photoreceptor cells.

Somatosensory Senses

The body's sensations, including touch, temperature, pain, and proprioception, allowing us to perceive our environment and body position.