If Preferences Are Quasilinear, Then for Very High Incomes the Income

question 79

True/False

If preferences are quasilinear, then for very high incomes the income offer curve is a straight line parallel to one of the axes.

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Definitions:

Budget Constraints

A representation of the trade-offs between different goods and services that a consumer can afford with their limited income.

Optimum

The most favorable condition or level for growth, reproduction, or efficiency, or the best or most efficient use of resources.

Substitution Effect

The financial concept where consumers opt for cheaper alternatives when prices increase or their income falls.

Income Effect

Adjustments in the income of a person or the economy and how these adjustments affect the need for certain goods or services.