Purchasing power of Income Effects

Whenever the price increases for a good that you enjoy extremely and purchase regularly: (i) The purchasing power of your income is reduced. (2) You adjust more rapidly than when the good was insignificant to you. (3) Your substitution effect is over-powered by an income effect and hence your demand curve is positively sloped. (4) You encounter diminishing marginal utility at low levels of the consumption.

Choose the right answer from the above option

View Complete Question

Related Questions in Microeconomics

Q : Tariffs Choose the right answer from

Choose the right answer from following. Tariffs: A) may be imposed either to raise revenue (revenue tariffs) or to shield domestic producers from foreign competition (protective tariffs). B) are also called import quotas. C) are excise taxes on goods exported abroad.

Q : Price of related goods-consequence on

Price of related goods: a) Substitute goods – Whenever the price of substitute goods raises they become dearer whenever the price replaces goods falls they bec

Q : Price taker in perfect competition

State how is a single buyer a price taker in the perfect competition? Answer: A single buyer’s share in total market demand is too significant that the buyer

Q : Dollar revenues and accounting costs

Can someone please help me in finding out the most accurate answer from the following question? The Accounting profit is the difference among: (1) Dollar revenues and accounting costs. (2) Net revenue and economic cost. (3) Accounting cost and economic cost. (4) Psych

Q : Analysis deregulation caused the

Choose the right answer of the following problem. "The government deregulated the electricity industry in California and a shortage of electricity occurred soon . It is clear that the deregulation caused the shortage." This statement requires careful analysis becau

Q : Uncertainty and Decision-making I have

I have a problem in economics on Uncertainty and Decision-making. Please help me in the following question. The error of omission would be: (i) The failure of an individual to invest in Microsoft 20 years ago. (ii) Individual cheating on a test. (iii)

Q : Market power and inefficiency The

The widespread and unregulated exercise of monopoly power is probable to result within: (1) economic inefficiency because price exceeds marginal cost. (2) the value of national income being higher than under competition. (3) a politically more accepta

Q : Arising Economic Discrimination

Economic discrimination occurs while: (1) economic rents are received by resource suppliers. (2) wages are proportional to workers’ differing productive contributions. (3) household incomes differ because of different resource ownership. (4) pur

Q : Organizing business to maximize the

I have a problem in economics on organizing business to maximize the funds. Please help me in the following question. The entrepreneur who wants to maximize her firm’s admittance to funds from investors or banks must organize the business as a: (1) Proprietorshi

Q : Scarcity of good in market problem In

In the market of papayas: (1) A scarcity exists at P2. (2) Papayas are a free good at P0. (3) Papayas are presently a scarce good. (4) Consumer’s demand prices equivalent P2 at quantity Q2. (5) Equilibrium price for papayas be P0.

Discover Q & A

Leading Solution Library

Avail More Than 1442508 Solved problems, classrooms assignments, textbook's solutions, for quick Downloads

No hassle, Instant Access

Start Discovering

18,76,764

1931551
Asked

3,689

Active Tutors

1442508

Questions
Answered

Start Excelling in your courses, Ask an Expert and get answers for your homework and assignments!!

Submit Assignment