5. The substitution effect of a price change A). will result in the consumer buy

Question

5. The substitution effect of a price change A). will result in the consumer buying less of a good at a higher price. B). will result in the consumer buying less of a good at a lower price. C). is less than the income effect for normal goods. D). is equal to the income effect for normal goods. As a consumer moves along an indifference curve A). the combination of goods he prefers will remain constant, but the level of satisfaction will vary B). the combination of goods will vary but the level of utility remains constant C) the combination of goods will vary, but the level of money income remains constant

Explanation / Answer

5. A) Less of a Good at a higher price

7 b) combination of goods will vary, but the level of utility remains constant

13 a) the derivation of the demand curve from indifference map

14 c) 4 (value for the budget line for no more than 10 specialty coffees

15 c) relative price ratio (P specialty coffee / P all other goods); opportunity cost

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