The substitution effect from a fall in the price of a gallon of gasoline is shown in the above figure by the movement from
A) point A to point C.
B) point A to point B.
C) point B to point C.
D) point A to point B and then to point C.
B
You might also like to view...
Suppose the price of an ounce of silver is 100 nuevos soles in Peru and $400 in the United States. This implies:
a. the Peruvian nuevo sol is worth four times the value of a U.S. dollar. b. the Peruvian nuevo sol is worth one-fourth the value of a U.S. dollar. c. Peru's economy must be four times larger than the U.S. economy. d. the U.S. economy must be four times larger than that of Peru. e. the U.S. dollar is worth four times the value of a Peruvian nuevo sol.
If increasingly more units of good Y must be given up as each successive unit of good X is produced, then the PPF for these two goods is
A) a downward-sloping straight line. B) circular. C) an upward-sloping curve. D) a downward-sloping curve that is bowed outward. E) a downward-sloping curve that is bowed inward.