1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Soloha48 [4]
3 years ago
13

For most normal goods the income effect and the substitution effect work in the same direction; so when the price of a good fall

s, both the income and substitute effects lead to a higher quantity demanded. How would this change if the good is an inferior good?
Business
1 answer:
bezimeni [28]3 years ago
8 0

Answer:

The income effect and substitution effect work in opposite directions and income effect is dominant.

Explanation:

In case of a normal good, both the income effect as well as substitution effect work in the same direction. A fall in the price of a product will increase the purchasing power of the consumer so its quantity demanded will increase.  

The consumers will also prefer the cheaper good so the substitution effect will cause the quantity demanded to increase.  

In case of an inferior good, however, income elasticity is negative. The income effect and substitution effect work in opposite directions.  

A price decrease in the case of an inferior good will increase the real income and purchasing power of the consumer. This will cause the quantity demanded of the inferior good to decline as the consumer will prefer a substitute normal good.

You might be interested in
As part of the initial investment, Ray Blake contributes equipment that had originally cost $101,300 and on which accumulated de
Mrrafil [7]

Answer:

This is a repeat question on Brainly but here you go.

<h2><em>$51,500 </em></h2>

Whether original cost or replacing cost is given in the question but we considered that cost in which the partner give their consent

So, the equipment amount should be debited at <em>$51,500 </em> instead of the original cost or the replacing cost

4 0
3 years ago
Lulzbot sells 6,000 units of its product for $500 each. The selling price includes a one-year warranty on parts. It is expected
Olin [163]

Answer:

$3,000

Explanation:

Warranty expense is an obligation on the business because business is liable to accept the claims of warranty. A estimated percentage of warranty expense is charges as an expense in each period.

Total Sales = $500 x 6,000 units = $3,000,000

Warranty Expense for the year = Sales units x 3% x warranty cost per unit

Warranty Expense for the year = 6,000 x 3% x $50 = $9,000

Recognised warranty cost in the year = 120 units x $50 = $6,000

Accrued Warranty expense = $9,000 - $6,000 = $3,000

5 0
3 years ago
Backed by the u. S. Government, these financial instruments are short-term debt obligations with a maturity of less than one yea
Alina [70]

Backed through U. S. government, those economic contraptions are brief-time period debt responsibilities with the adulthood of fewer than twelve months. they're taken into consideration threat-unfastened investments: Treasury bill.

The U. S. government is comprised of three branches; the legislative branch, govt branch, and the judicial department. each department works collectively to set the legal guidelines of the U.S. The congress, senate, and residence of Representatives are underneath the legislative department, which makes the laws.

The U. S. government is the commonplace authority of us, a federal republic in North the USA, composed of 50 states, a metropolis inside a federal district, five main self-governing territories, and numerous island possessions.

U. S. government consists of three separate degrees: the federal authorities, the state governments, and neighborhood governments President is both the head of the nation and head of the government of America and the Commander-in-chief of the militia. Under Article II of the charter, the President is liable for the execution and enforcement of the laws created by using Congress.

Learn more about U. S. government here: brainly.com/question/18464634

#SPJ4

4 0
1 year ago
What is a credit card balance
QveST [7]
That's the amount of charges owed to the credit card company. 
4 0
3 years ago
Read 2 more answers
Which of the following statement(s) is/are False? Assume a positive interest rate
gtnhenbr [62]

Answer:

False Statement:

B. Only II is False.

Explanation:

If the cash flow from a project is farther out, the present value will be lower, all else being equal.  This is because of the time value of money.  This concept states that the money you receive today is higher in value than the same amount received in the future.  And if the future is father out, then the value of the money will continue to reduce in relative value based on this time value of money concept.

5 0
3 years ago
Other questions:
  • Park Corporation is planning to issue bonds with a face value of $2,000,000 and a coupon rate of 10 percent. The bonds mature in
    15·1 answer
  • A manufacturing company applies factory overhead based on direct labor hours. at the beginning of the year, it estimated that fa
    9·1 answer
  • According to the _____, the most effective management theory or idea depends on the kinds of problems or situations that manager
    5·1 answer
  • Which of the following are aspects covered by HR management?
    8·1 answer
  • If you were opening a checking account at a local bank, what services would you expect your bank to provide?
    7·1 answer
  • An employee of JHT Holdings, Inc., a private trucking company, was responsible for resolving roadway accident claims under $25,0
    14·1 answer
  • Many times, clients will shift new people into the project who have no experience with it as they move their key people to new c
    7·1 answer
  • Sabrina’s father is the limo driver to the President and CEO of RSG, an investment bank in New York. Sabrina buys RSG stock when
    12·1 answer
  • The Balance Sheet reports assets, liabilities, and stockholders' equity at a specific date. A : True B : False
    10·1 answer
  • In a town's general fund operating budget for the year, the amount of its estimated revenues exceeded the amount of its appropri
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!