Consumption of compact discs

Assignment Help Business Economics
Reference no: EM132168035

Gladys loves music and spends her money only on tapes and compact discs. She is always willing to trade 2 tapes for 1 compact discs. Originally, music stores sold compact disc for $9 each and tapes for $5 each. Then the price of compact discs fell to $8 each. The change in her consumption of compact discs that resulted was

a. entirely due to the substitution effect.

b. entirely due to the income effect.

c. partly due to the income effect and partly due to the substitution effect.

d. due to the income effect for low incomes and substitution effect for high ones.

e. There was no change in her demand for compact discs.

Can you please tell me the answer and how you got it?

Reference no: EM132168035

Questions Cloud

Observing and developing management plan for classroom : Describe your experience in observing and developing a management plan for the classroom.
Which plan is more attractive to them : Senator Paula Stevens wants to revise the investment tax credit. If most firms use an interest rate of 15% and are taxed at 34%, which plan is more attractive.
What are the major provisions : Research a federal, state, or municipal tax credit relevant to engineering projects. When was it enacted? What are its major provisions.
What are some of the potential legal issues : What are some of the potential legal issues that a trainer should consider while planning an adventure learning program?
Consumption of compact discs : Then the price of compact discs fell to $8 each. The change in her consumption of compact discs that resulted was
When discussing what is needed for process satisfaction : Which of the following distracters is considered false when discussing what is needed for process satisfaction?
What would be the taxable income : If Laura and Ring had three kids and $26,000 of itemized expenses, what would be their taxable income, tax, marginal tax rate, and average tax rate?
How much of the honeymoon expenses can they fund : If Laura and Ring are planning to marry, should they do it in December or January? Assume that a December marriage implies a joint return for this year.
What is process satisfaction : What is process satisfaction, and what does it provide to the employee?

Reviews

Write a Review

Business Economics Questions & Answers

  What is the opportunity cost between tanks and noodles

Imagine the country of Zed, which has the following production possibilities curve: What is the opportunity cost between tanks and noodles? Is it constant? What is the opportunity cost between tanks and noodles? Is it constant? Graph the ppc. True, f..

  Replace human labor entirely with robotic inputs

Under the cost minimization rule, when will a firm employ only human labor? Why does the cost minimization rule suggest that it is unlikely a firm actually would replace human labor entirely with robotic inputs?

  Who benefits from a tariff or quota

Who benefits from a tariff or quota? Who loses? Why would domestic markets benefit from protectionist trade policies? How do protectionist trade policies affect a government's wealth and fiscal policy?

  Businesses as illinois considers minimum wage hike

Do you really want a minimum wage?: Stakes are High for Workers, Businesses as Illinois Considers Minimum Wage Hike

  Demonstrate the short-run effect of this tax cut

Demonstrate the short-run effect of this tax cut using the IS-LM model also the AD-SRAS-LRAS model. Illustrate what will take place to o/p also the interest rate.

  What evidence can you cite to support your position

Department of Health and Human Services, but rather with the Internal Revenue Service. What evidence can you cite to support your position?

  Large concessions from employees and avoided bankruptcy

Large airlines have enormous fixed costs. Their business after the attack of September 11, 2001, was dismal. US Air and United declared bankruptcy. American obtained large concessions from employees and avoided bankruptcy (until 2011). Your written c..

  Describe the subsidy program

Farm land is a subsidy program. Describe the subsidy program and explain what spillovers are generated from this subsidy.

  Real exchange rate of euros to the dollar

Suppose that Australia's price level is 140, the Euro price level is 100, and the nominal exchange rate of pounds to the dollar is Euro

  Indicate what happens to demand or supply

Given the products below and the events that affect them, indicate what happens to demand or supply, and the equilibrium price and quantity in a competitive market. Identify the determinant of demand or supply that causes the shift.

  Considering the purchase of an established business

Suppose you are considering the purchase of an established business that has the expected profit stream noted below. If want a 20% return on you investment, what is the maximum amount you should pay for the property?

  What will happen in the market for coffee

Show in a graph, one for each question, what will happen (if anything) in the market for coffee when each of the following happens:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd