Maude Thinks Delphiniums and Hollyhocks Are Perfect Substitutes, One for One.If

question 22

Multiple Choice

Maude thinks delphiniums and hollyhocks are perfect substitutes, one for one.If delphiniums currently cost $3 per unit and hollyhocks cost $4 per unit and if the price of delphiniums rises to $6 per unit,

• A)the income effect of the change in demand for delphiniums will be bigger than the substitution effect.
• B)there will be no change in the demand for hollyhocks.
• C)the entire change in demand for delphiniums will be due to the substitution effect.
• D)1/3 of the change in demand will be due to the income effect.
• E)2/3 of the change in demand will be due to the income effect.

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Definitions:

Le Bon's

Refers to theories or principles by Gustave Le Bon, notably on crowd psychology, suggesting that crowds operate on irrational, emotional forces.

Resource Mobilization

The process of gathering and managing resources (financial, human, informational) for the purpose of achieving organizational or group objectives.

Framing Theory

A theory suggesting that how information is presented (framed) influences the choices people make about how to process that information.

Egypt

A country in Northeast Africa, known for its ancient civilization, pyramids, and the Nile River.