As a consumer's income rises, the proportion of income spent on food falls. This assertion is known as

If the exchange rate goes from $2.00 = 1 € to $1.80 = 1 €, the result is a

A) 10% depreciation of the euro with respect to the dollar. B) 10% depreciation of the dollar with respect to the euro. C) 10% appreciation of the euro with respect to the dollar. D) None of the above.

Individuals derive utility from picnics, p, and kayak trips, k. Assuming that an individual's utility is U(p,k) = k0.5p0.5 and income is $100, what is the marginal rate of substitution (MRS) between picnics and kayak trips?

A) MRS = 1. B) MRS = -1. C) MRS = - D) There is no substitution because picnics and kayak trips are perfect complements.