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billyhilly billyhilly
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4 years ago

Question 1.

The limitation that a consumer's total expenditure on goods and services purchased cannot exceed the income available is referred to as



▸

the budget constraint.



▸

the price constraint.



▸

economizing behavior.



▸

maximizing behavior.



Question 2.

Which of the following correctly describes the result of a price increase for an inferior good?



▸

The substitution effect causes the demand for the good to decrease; the income effect causes the demand for the good to increase.



▸

Both the substitution effect and the income effect cause the consumer to buy less of the good.



▸

The substitution effect causes the consumer to buy less of the good and the income effect causes the consumer to buy more of the good.



▸

The substitution effect causes the demand for the good to increase; the income effect causes the demand for the good to decrease.

Textbook 
InMicro

InMicro


Edition: 1st
Authors:
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anuja709anuja709
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4 years ago
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billyhilly Author
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4 years ago
You make an excellent tutor!
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Brilliant ツ
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Thanks
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