Question 19 1 pts When the price of a normal good falls so you decide you want t

Question

Question 19 1 pts When the price of a normal good falls so you decide you want to buy more of them. This is called the income effect O the substitution effect O the elasticity effect 0 the law of diminishing marginal utility Question 20 1 pts A grocery store put salt on sale but found that total revenues fell.This can be explained by which of the following? O The demand curve for salt is vertical O The demand for salt is unitary elastic. O The demand for salt is inelastic. O The demand for salt is very elastic.

Explanation / Answer

19. the income effect

Price fall increases purchasing power of a consumer thus allowing a him to buy a better extra of the same product for the same price. As people's incomes and purchasing power rise the demand for normal goods increases. The income effect has the fallouts of consumers spending more or less in general.

20. The demand for salt is inelastic

Inelastic demand can be defined as the demand for a product does not change relative to changes in its price. In other words, the demand for a good will stay the same whether the price of a good increases or decreases.

Related Questions

Navigate

• Browse (All)
• Browse Q
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.