The answer would be between A and D.
Answer:
D) Susie would buy more massages and fewer rounds of golf,as predicted by the substitution effect.
Explanation:
Let's check the utility that Susie gets from consuming these products.
The second round of golf gives her 20 units of satisfaction at $20 = 20/20 = 1
The third massage gives her 30 units of satisfaction at $30 = 30/30 = 1
But now the price the price for massage has come down to $15. The ratio of their prices would be
20/15 = 1.333
1.3 is greater than 1
So she should substitute golf for massages
Answer:
Explanation:
im sorry i just need points sorry ask someone else sorry ;)
Answer:
You open up too easily
Explanation:
Keep your guard up and stop trusting everyone on brainly
Answer:
Shoe-leather Costs.
Explanation:
In this scenario, Bob manages a grocery store in a country experiencing a high rate of inflation. He is paid in cash twice per month. On payday, he immediately goes out and buys all the goods he will need over the next two weeks in order to prevent the money in his wallet from losing value.
What he can't spend, he converts into a more stable foreign currency for a steep fee. This is an example of the Shoes-leather costs of inflation.
A Shoe-leather costs refers to the costs of time, energy and effort people expend to mitigate the effect of high inflation on the depreciative purchasing power of money by frequently visiting depository financial institutions in order to minimize inflation tax they pay on holding cash.
Metaphorically, it ultimately implies that in order to protect the value of money or assets, some people wear out the sole of their shoes by going to financial institutions more frequently to make deposits.
Hence, Bob is practicing a shoe-leather cost of inflation so as to reduce the nominal interest rates.
