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2 years ago

The reason the substitution effect works to encourage a consumer to buy less of a product when its price increases is:

Business

1 answer:

ikadub [295]2 years ago

8 0

Answer:

The correct answer is the option C: the product is now relatively more expensive than it was before.

Explanation:

To begin with, the <em>substitution effect</em> is the term that, in economics, refers to the situation where a products or services increase or decrease its value in comparison with other and therefore it causes a substitution from the consumer regarding that change in the price.

Secondly, in the case where a product increases its price the substitution effect will cause that the consumer decides to purchase other products due to the fact that the first product is now relatively more expensive than it was before and therefore a substitution of the good takes place.

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People who receive the benefit of a good without contributing to its costs of production are called?

masha68 [24]

Free riders are those who gain from a thing without contributing to its manufacturing expenses.

<h3>When the creation of a thing incurs external expenses, the?</h3>

An external cost occurs when the production or use of a goods or service imposes a cost (negative effect) on a third party.
If a good has external costs connected with it (negative externalities), the social costs will be larger than the private cost.
Market failure may occur in the presence of external expenses. This is because the free market frequently ignores the existence of external expenses.
The cost to a third party of consuming/producing one more unit is known as the external marginal cost (XMC).

learn more about external costs refer:

brainly.com/question/14203073

#SPJ4

5 0

1 year ago

At the beginning of Year 1, Trey Inc., purchased a machine with a total acquisition cost of $33,000. The machine has an estimate

soldier1979 [14.2K]

Answer:

$8,000

Explanation:

Data provided in the question:

cost of machine = $33,000

Estimated residual value = $3,000

Estimated useful life = 3 years

Estimated useful life in terms of production = 60,000 units

Total units produced in year 1 = 16,000

Now,

Rate of annual depreciation with respect to units produced

= [ Cost - Salvage value ] ÷ Estimated useful life in terms of production

= [ $33,000 - $3,000 ] ÷ 60,000

= $0.5 per unit

Therefore,

Depreciation expense for the year 1

= Rate of annual depreciation × Total units produced in year 1

= $0.5 per unit × 16,000 units.

= $8,000

7 0

2 years ago

All are examples of independent regulatory agencies except:

11111nata11111 [884]

The Department of Justice is not an example of an independent regulatory agency.

5 0

2 years ago

Look at Exercise 19.2. Compute the opportunity costs of producing sweaters and wine in both France and Tunisia. Who has the lowe

monitta

Answer:

Answer Illustration : Opportunity Cost of producing Wine is lesser in France, Opportunity Cost of producing Sweaters is lesser in Tunisia. So, France has comparative advantage in Wine, Tunisia in Sweater.

Explanation:

Opportunity Cost is the cost of next best alternative foregone while choosing an alternative.

Opportunity Cost of producing Sweaters & Wine in France & Tunisia are quantities of other goods (Sweaters or Tunias) sacrifised while choosing either. Sweater Opportunity Cost - Wines sacrifised, Wine Opportunity Cost - Sweaters sacrifised.

The country has a comparative advantage in a good if it can produce it with relatively less opportunity cost (in terms of other good sacrifised) than other country.

Ex : Production Possibilities

Wine Sweater Trade off (Wine :Sweater)

France 10 5 1:0.5 or 2:1

Tunisia 8 24 1:3 or 0.33:1

France produces Wine with lesser opportunity cost (sweater sacrifised) than Tunisia [0.5 sweater < 3 sweaters] ; it has comparative advantage in Wine.
Tunisia produces Sweater with less opportunity cost (wine sacrifised) than France [ 0.33 wine < 2 wines] ; it has comparative advantage in Tunisia

7 0

3 years ago

Why does switerland import so many goods fro indonesia such as textiles, garments, furniture, and agricultural products?

Step2247 [10]

The answer to this question would be A because Indonesia produce goods cheaper than Switzerland can make them this is because the labor is cheaper.Sorry for the late answer.

4 0

3 years ago