Answer the following questions true (T) or false (F)
1. The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product.
2. If the price of peaches, a substitute for plums, decreases the demand for plums will increase.
3. An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.
1. FALSE
2. FALSE
3. FALSE
Economics
You might also like to view...
Nontariff barriers often take the form of:
A) tariffs. B) fees and surcharges. C) health and/or safety restrictions. D) import quotas.
Economics
When the Fed _______ governments bonds it _______ bank reserves.
A) sells; increases B) buys; increases C) buys; decreases D) issues new; increases
Economics