When the Terms of Trade Increase,the

question 3

Multiple Choice

When the terms of trade increase,the

• A) substitution effect is to increase consumption of good a.
• B) income effect is unambiguously positive.
• C) income effect is unambiguously negative.
• D) substitution effect is to decrease consumption of good b.
• E) subsitution effect is to decrease consumption of good a.

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Definitions:

George Ritzer

An American sociologist known for his work on consumerism, globalization, and the concept of "McDonaldization," which describes the process by which principles of the fast-food industry dominate sectors of society.

Prosumer

A portmanteau of producer and consumer, indicating individuals who produce some of the goods and services entering their consumption.

Consumer

An individual who purchases goods and services for personal use from the available offerings in the market.

Deterritorialization

A concept in socio-cultural studies that refers to the weakening of the ties between culture and geographical location, often as a result of globalization.