Luxury brands like designer sunglasses are goods that may exhibit snob effects. Suppose this is true, and the price for a particular brand increases. What happens to the component changes in the quantity demanded?
A) Pure price effect and snob effect are negative
B) Pure price effect and snob effect are positive
C) Pure price effect is positive, snob effect is negative
D) Pure price effect is negative, snob effect is positive
D
You might also like to view...
Any combination of two goods that lies within the production possibilities frontier
A) is currently impossible to produce. B) is currently possible to produce. C) represents a more efficient combination of output than anything lying beyond the frontier. D) represents a more efficient combination of output than anything lying on the frontier.
There is a difference between who is legally required to send a tax payment to the government and who bears the burden of the tax. Which of the following would have the most impact on who bears the burden of an excise tax?
A) The elasticity of demand for the item that is taxed. B) whether the tax is based on the ability-to-pay principle or the benefits-received principle C) whether the tax is imposed by the federal government or a state government D) The motive for the tax. If the tax is designed to raise revenue, more of the burden will fall on firms. If the tax is designed to achieve a social objective (for example, to discourage smoking) more of the burden will fall on consumers.