Bart consumes food and clothing, which are both normal goods. Suppose that the price of food falls. The substitution effect of this price decrease is ________ and the income effect of this price decrease is ________
A) that Bart buys more clothing and less food; that Bart buys more of both food and clothing
B) reflected by a change in the relative prices of food and clothing; is represented by a movement along the original indifference curve
C) reflected by a parallel shift outward of the budget line; that Bart earns more money each month
D) reflected by the change in the slope of the budget line; that Bart has greater purchasing power
D
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What will be an ideal response?
Which of the following involves payment of part of the face value or principal prior to maturity?
A) fixed-payment loan B) coupon bond C) discount bond D) simple loan