View Single Post
  #3  
Old October 7th, 2008, 06:22 PM
GoTerps GoTerps is offline
Newbie
 
Join Date: Oct 2008
Posts: 4
Country:
Thanks: 1
Thanked 1 Time in 1 Post
GoTerps is on a distinguished road
Exclamation Microeconomics help!!--any econ major??

Defend or refute the following statements:

a. "If the income and substitution effects of a rise in the price of a good both cause consumption of the good to fall, the good is inferior"
b. "A peasant farmer allocates his entire budget to two goods; rice and beans. If rice is an inferior good."
c. "Increases in interest rates increase the utility of net savers, but decrease the utility of net borrowers.

Also,

Both persons A and B, have identical preferences, and identical wage rates. A has no non-labor income, but B receives a non-labor income (husband's pension). Assuming that leisure is a normal good, who will work more hours??

Thanks so much!!

Last edited by GoTerps; October 8th, 2008 at 06:50 PM.
Reply With Quote