Table 10-4 -Refer to Table 10-4,which Lists the Values of Harry Taber's

question 72

Multiple Choice

Table 10-4

-Refer to Table 10-4,which lists the values of Harry Taber's marginal utility and marginal utility per dollar for Italian submarine (sub) sandwiches and tacos.Assume that the price of the sub sandwiches is $4 and the price of tacos is $2.When Harry's income is $14 he buys two Italian sub sandwiches and three tacos.The last column lists the values of the marginal utility per dollar for tacos when the price of tacos decreases to $1.Complete this statement: As a result of the change in price,the marginal utility of each taco Harry consumes increases and

• A)the substitution effect of the price change will cause Harry to buy more tacos and fewer subs.
• B)the substitution effect of the price change will cause Harry to buy more tacos if they are a normal good,and fewer tacos if they are an inferior good.
• C)the substitution effect will cause Harry to buy another sub because his purchasing power has increased.
• D)the substitution effect will cause Harry to buy fewer tacos.

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Definitions:

Independent Variables

Variables that are manipulated or changed in an experiment to observe their effects on dependent variables.

Curvilinear Relationships

Relationships between two variables where the strength and/or direction of the association changes over the range of the variable's value, forming a curve rather than a straight line.

Confounds

Variables that could potentially contaminate or influence the outcome of an experiment, making it hard to interpret the effects of the primary variables of interest.

Factorial Design

An experimental strategy in which factors are varied together to examine their interaction effects on a response variable.