Goods 1 and 2 Are Perfect Complements and a Consumer

question 44

Multiple Choice

Goods 1 and 2 are perfect complements and a consumer always consumes them in the ratio of 2 units of good 2 to 1 unit of good 1.If a consumer has an income of $300 and if the price of good 2 changes from $5 to $6, while the price of good 1 stays at $1, then the income effect of the price change

• A)is 6 times as strong as the substitution effect.
• B)does not change the demand for good 1.
• C)accounts for the entire change in demand.
• D)is exactly twice as strong as the substitution effect.
• E)is 5 times as strong as the substitution effect.

Grasp the audience-centered approach in business communication.

Acknowledge the ethical considerations in business communication.

Understand the significance of communication skills in the workplace.

Recognize the importance of adapting messages to specific audiences.

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Definitions:

Net Operating Income

A company's total profit from its operations, excluding non-operating income and expenses, such as taxes and interest.

Total Sales Dollars

The complete amount of revenue generated by a company from sales activities within a specific period, measured in currency.

Contribution Format

A type of income statement format that separates fixed and variable costs, emphasizing the contribution margin.

Income Statement

A financial report detailing a company's income, costs, and gains for a given time frame.