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
yKpoI14uk [10]
3 years ago
9

According to the income effect, when the price of automobiles rises, people buy fewer automobiles because a. the nominal amount

of their paychecks is smaller. b. the purchasing power of their income is reduced. c. their demand for automobiles is very elastic. d. they substitute other forms of transportation for driving.
Business
2 answers:
antoniya [11.8K]3 years ago
8 0

Answer:

B. the purchasing power of their income is reduced

Explanation:

Income effect results when there's a change in the demand for commodities caused directly as a results from changes in the consumer's purchasing power due to changes in real income of prices of the commodity. When there's an increase in the price of automobiles, the purchasing power of customers reduces as income remains constant. This is because the consumers would no longer be able to purchase goods and services in their regular amount as a results of increase in the price of those goods and services or reduction in the real income.

belka [17]3 years ago
6 0

Answer:

b. the purchasing power of their income is reduced.

Explanation:

Income effect is defined as the change in demand of a product that is a result of change in purchasing power of an individual, there are changes in real income.

When there is price increase the number of goods an individual's income can buy is reduced, so his purchasing power reduces. He will demand less of the good.

When there is a reduction in price purchasing power increases and customer can demand for more of the good.

In this scenario the increase in price of automobiles results in reduction in purchasing power, and reduction in amount demanded.

You might be interested in
When ladies' home journal ceased publication in 2014, it still had plenty of advertisers interested in buying space in the magaz
Natasha2012 [34]
That statement is false.
The very reason they ceased publication is because they couldn't obtain enough revenue to do so (which mostly come through ads)
This happen because of wide variety of similar journal that could be easily accessed through the websites for free.
6 0
4 years ago
Describe the relationship between temps tyre and kinetic energy
Pani-rosa [81]
Temperature is a measure of the average kinetic energy of the particles in an object.so pretty much temperatures also measure how kinetic energy is not how hot or cold it is. hope I helped :)
5 0
3 years ago
How do I get better at Risk the Board Game
natka813 [3]
Research risk and reward strategies with tactical advantages and disadvantages and use them to create how you want to play risk, either passive or dominant in your strategy but remember to get help, theres no need to do it alone if you have friends that have experience in this game and are willing to help you create a strategy that will enhance your experience and greatly increase your skills in Risk.
6 0
4 years ago
Multiple Product Planning with Taxes
PilotLPTM [1.2K]
I have a feeling its B or D.. not so sure (:
3 0
3 years ago
If the minimum attractive rate of return is 7%, which alternative should be chosen assuming identical replacement (like kind exc
ira [324]

Answer:

The alternative that should be chosen assuming identical replacement is:

Alternative B.

Explanation:

a) Data and Calculations:

Alternatives:

                                                A            B

First Cost                           $5,000     $9,200

Uniform Annual Benefit     $1,750      $1,850

Useful life, in years                4              8

Rate of return                       7%            7%

Annuity factor                   3.387          5.971

Present value of annuity $5,927.25 $11,046.35

Net cash flow                 $927.25     $1,846.35

b) Alternative B yields a higher return than Alternative A.  Since the two alternatives are based on the same rate of return, Alternative B will bring in a higher annual benefit, even when discounted to the present value.

7 0
3 years ago
Other questions:
  • Which of the following is NOT true about a command economy?
    13·1 answer
  • Money that is vested in a retirement account is
    5·1 answer
  • Each of Boggart’s production managers (annual salary cost, $45,000) can oversee 60,000 machine hours of manufacturing activity.
    12·1 answer
  • Select the correct answer.
    6·1 answer
  • Dowell Company produces a single product. Its income statements under absorption costing for its first two years of operation fo
    9·1 answer
  • All of the following are examples of demographics EXCEPT?
    10·1 answer
  • A reference value involves a. comparing the costs and benefits of items from one particular manufacturer or distributor. b. prod
    12·1 answer
  • Which option identifies the concept represented in the following scenario?
    8·1 answer
  • Identify the obstacles that are most relevant for a person trying to become a Geographer. Check all that apply.
    8·2 answers
  • 1. You are a small employer wishing to establish a benefits program for your employees. What things should you consider to ensur
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!