Which of the following statements is FALSE?
A) When the relative price of a good falls, the substitution effect always leads the consumer to substitute more of that good for the other good.
B) For a normal good, the income effect reinforces the substitution effect.
C) For an inferior good, the income effect offsets the substitution effect.
D) For an inferior good, the income effect is positive.
D
Economics
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Refer to Table 8-5. The value added by the automobile dealer equals
A) $7,000. B) $15,000. C) $18,000. D) $25,000.
Economics
When the actual real GDP exceeds the natural real GDP as in Figure 1-2 above, we expect to find that unemployment is
A) high and inflation is high. B) low and inflation is high. C) low and inflation is low. D) high and inflation is low.
Economics