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3 years ago

With only two goods, if the income effect is in the same direction as the substitution effect then the good is ____.

Business

1 answer:

Leya [2.2K]3 years ago

7 0

Answer:

Normal good

Explanation:

Income effect Is change in quantity demanded when the consumers purchasing power change as a result of a change in real income.

Substitution effect is when quantity demanded falls as a result of rise in price of a good which leads consumers to purchase cheaper alternatives.

A normal good is a good whose demand increases as income increases.

If the price of a normal good falls, the real purchasing power of the consumer increases and the consumer buys more of the good. Also, the consumer substituites from more expensive alternative goods to the more cheap normal good. The income and substitution effect both move in the same direction.

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Suppose a senator considers introducing a bill to legislate a minimum hourly wage of $12.50.

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Binding minimum wages cause structural unemployment. As with all price floors, a deadweight loss results, because the quantity supplied is much greater than the quantity demanded. In this case, the price of labor is the wage, and the deadweight loss = structural unemployment
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3 years ago

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Answer:

The correct answer is a. production points outside the production possibility frontier are unattainable

Explanation:

Production possibility frontier graph is attached.

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The distribution of a percentage of a firm's profits among its employees is called?

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Employee perks, also known as fringe benefits, perquisites, or perks, refer to various forms of non-wage remuneration given to employees in addition to their regular earnings or salaries. Employee perks, particularly in British English, also refer to rewards in kind.

Salary packaging or salary exchange arrangements are situations where an employee trades in (cash) compensation for another type of perk. The majority of employee benefits are at least partially taxable in most nations. Housing (provided by the employer or paid for by the employer), furnished or not, with or without utilities free, group insurance (health, dental, life, etc.), disability income protection, retirement benefits, daycare, tuition reimbursement, sick leave, and paid vacation are some examples of these benefits.

Learn more about Employee Benefit here.

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