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Nastasia [14]
1 year ago
15

suppose a consumer has preferences between two goods that are perfect substitutes. can you change prices in such a way that the

entire demand response is due to the income effect?
Business
1 answer:
Rashid [163]1 year ago
4 0

Yes you can change prices in such a way that the entire demand response is due to the income effect.

What is Income effect?

Usually, when we talk about perfect alternatives, we are talking about lowering the cost of the expensive good. If you were on the y axis of the performance subs graph, the price of good x, which was previously quite expensive, has now decreased. Therefore, your decision will be limited to the x axis.

The term "income effect" describes the shift in real income or purchasing power brought on by a price adjustment. Therefore, as prices drop, your real income essentially rises.

If we lower the cost of the already affordable good. The consumer's real income then rises. As a result, he purchases the cheap item.

Therefore, this shift in demand, where he now purchases more of the cheap commodity, has been brought about by an increase in real income due to a decrease in the price of the previously cheap good.

So, The answer is Yes.

To know more abou Income Effect:

brainly.com/question/1416285

#SPJ4

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Double entry Received commission by Cheque
gizmo_the_mogwai [7]

Answer:

congratulations sirr

Explanation:

ask any question or queries not other things

sorry if this was hurtful to you

8 0
3 years ago
During the current year, Reed Consulting Group acquired long-term available-for-sale securities at a $70,000 cost. At its Decemb
kipiarov [429]

Answer:

Account                                             Debit                             Credit

Unrealized loss (Equity)                    $12,000

Fair Value adjustment (Avaliable                                         $12,000

for sale)

Explanation:

Given Data:

Long-term available-for-sale securities=$70,000

December 31, Securities fair values=$58,000

Required:

The necessary year-end adjusting entry related to these securities.

Solution:

Unrealized Loss occurred=$70,000-$58,000

unrealized Loss occurred=$12,000

Adjusting entry:

Account                                             Debit                             Credit

Unrealized loss (Equity)                    $12,000

Fair Value adjustment (Avaliable                                         $12,000

for sale)

3 0
4 years ago
Which function relates to maintaining inventory?
finlep [7]

Answer:

The production department is the unit tasked with ensuring that the business has a continuous flow of merchandise inventory. As selling activities are continuous, the production unit must keep up the pace by ensuring there is sufficient inventory for the sales team to sell.

5 0
3 years ago
Suppose the nominal interest rate on car loans is 11% per year, and both actual and expected inflation are equal to 4%. complete
viva [34]

Real Interest rate is the nominal interest rate adjusted for Inflation. It can be calculated using the following formula:

RR = (NR- IR)/(1+IR)

Where RR is real rate, NR is nominal rate and IR is inflation rate. In this problem, Nominal Rate NR = 11% and Inflation Rate IR is 4%. Therefore, Real rate would be:

RR = (0.11 -0.04)/(1+0.04)

RR = 6.73%

Therefore, real rate of return would be 6.73%.


7 0
3 years ago
According to Wallach, what is short-termism, and why is it a problem?
Salsk061 [2.6K]

Answer:

<em><u>short-termism </u></em>

Is the acting upon short term vision of the needs and problems that must be addressed. It is a problem because the vision that is important is the Long path vision.

<em><u>What is “longpath” and why did Wallach develop the concept?  </u></em>

Is a concept that combines long term vision and goal oriented. Wallach develop that concept as he did not find a term that frame what is intended in the long run that was goal oriented.

<em><u>Briefly discuss each of the three ways of thinking that Wallach describes.  </u></em>

Transgenerational thinking: Thinking the impact of your actions in the future generations to come.  

Futures thinking: The future is not related only with better technology but with how will human relationships, moral, art and feelings like compassion will evolve.

Telos thinking: This is an invitation to think having in mind what is the "ultimate aim" of our actions as little of they might be. It is important to raise the question: how this action that I am doing now will impact or change the future in 20,50 or 100 years to come.

<em><u>How does Wallach relate the future to a part of speech? </u></em>

Wallach make a link between Thomas Khun quote: “People don’t shift unless they have a vision of what it is they’re shifting to.” an Martin Luther King Speech of "I Have a Dream" he says that that speech is successful as it shows what is the vision of what a dream must looks like

4 0
3 years ago
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