According to the income effect, when the price of automobiles rises, people buy fewer automobiles because:
a. they substitute other forms of transportation for driving.
b. the nominal amount of their paychecks is smaller.
c. the purchasing power of their income is reduced.
d. their demand for automobiles is very elastic.
c
Economics
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In the 1950s, crude oil and natural gas imports were restricted to keep the domestic industries viable in case of a war. The rationale for this protection is the ________ argument for protection
A) save domestic jobs B) national security C) anti-dumping D) infant-industry E) penalizing lax environmental standards
Economics
If an individual's income rises 40 percent and his clothing purchases increase 50 percent in response, the income elasticity for clothing by the individual is
A) -0.8. B) 0.8. C) 1.25. D) -1.25.
Economics