The Table Below Shows the Total Utility Associated with Various

question 29

Multiple Choice

The table below shows the total utility associated with various units of goods X and Y.Table 7.5

-Which of the following statements concerning income and substitution effects is not true?

• A)Income and substitution effects cause the demand curve to slope downward.
• B)When the price of a good falls, real purchasing power increases and consumers can purchase more of all goods.
• C)The substitution effect describes the situation in which more of the good whose price has fallen is purchased, and less of all other goods is purchased.
• D)A price decrease of one good cannot cause the income effect.
• E)Income and substitution effects are related to diminishing marginal utility and consumer equilibrium.

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Definitions:

Carboniferous

A geologic period and system that extends from the end of the Devonian Period, about 359.2 million years ago, to the beginning of the Permian Period, about 299 million years ago.

Reptiles

Cold-blooded vertebrates that breathe air, usually lay eggs, and have scales covering their bodies, including snakes, lizards, crocodiles, and turtles.

Chordates

Deuterostome animals that, at some time in their lives, have a cartilaginous, dorsal skeletal structure called a notochord; a dorsal, tubular nerve cord; pharyngeal slits; a postanal tail; and an endostyle (or its derivative, a thyroid gland).

Cyanobacteria

Photosynthetic microorganisms, formerly known as blue-green algae, that are important in oxygen production and nitrogen fixation.