The Net Change in Quantity Demanded of a Good Following

question 103

Multiple Choice

The net change in quantity demanded of a good following a price change

• A)is equivalent to the substitution effect
• B)is equivalent to the income effect
• C)must decrease as marginal utility rises
• D)is negative only when the income effect is negative
• E)reflects both the substitution and income effects

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Definitions:

Financial Loss

The decrease in monetary value resulting from an event, transaction, or series of transactions.

Greenmail

A strategy used to shake off a bidder’s hostile suit by offering to buy, at significantly higher cost, the portion of stock already owned by the bidder who is trying to take over the company.

Valuable Piece

An item considered to have significant monetary or sentimental worth.

Hostile Bidder

A company or individual that makes an offer to buy another company without obtaining the consent of the latter's board of directors.