Answer to Question #74444 in Microeconomics for Em

Question

21. Which of the following scenarios is consistent with a price change for a normal good?
a. The substitution effect is +2 and the income effect is -2.
b. The substitution effect is +2 and the income effect is +1.
c. The substitution effect is -2 and the income effect is -2.
d. The substitution effect is -2 and the income effect is +1.
e. none of the above


22. Which of the following scenarios is consistent with a price change for an inferior good?
a. The substitution effect is +2 and the income effect is -2.
b. The substitution effect is +2 and the income effect is +1.
c. The substitution effect is -2 and the income effect is -2.
d. The substitution effect is -2 and the income effect is +1.
e. none of the above

Answer 1

21 c
22 e