Examlex

Solved

Use the Following to Answer Questions

question 20

Multiple Choice

Use the following to answer questions:
Figure: Music and Movie Downloads 5 Use the following to answer questions: Figure: Music and Movie Downloads 5   -(Figure: Music and Movie Downloads 5)  Refer to the figure. The consumer in this diagram is initially optimizing consumption at point A than moves to point B. The substitution effect of the price change causes the consumer to: A)  reduce the number of music downloads by 3. B)  reduce the number of music downloads by 4. C)  increase the number of music downloads by 1. D)  increase the number of music downloads by 3.
-(Figure: Music and Movie Downloads 5) Refer to the figure. The consumer in this diagram is initially optimizing consumption at point A than moves to point B. The substitution effect of the price change causes the consumer to:


Definitions:

Marginal Rates

Rates that apply to the next level of consumption, production, or income, often used in taxation to refer to the percentage of tax applied to the next dollar earned.

Indifference Curves

Graphical representations used in microeconomics to show different combinations of two goods that provide the same level of utility or satisfaction to an individual.

Contract Curve

In economics, the locus of points representing the set of mutually beneficial (Pareto optimal) allocations of goods or resources between two or more individuals.

Individuals

Persons or entities regarded as single and distinct from a group, often considered in terms of legal rights, responsibilities, and social roles.

Related Questions