Test bank for Microeconomic Theory Basic Principles and Extensions 12th Edition Nicholson Snyder 1305505794 9781305505797 Download full test bank at: https://testbankpack.com/p/test-bank-for-microeconomic-theory-basicprinciples-and-extensions-12th-edition-nicholson-snyder-13055057949781305505797/ Download full solution manual at: https://testbankpack.com/p/solution-manual-for-microeconomic-theorybasic-principles-and-extensions-12th-edition-nicholson-snyder-13055057949781305505797/
1. If the prices of all goods increase by the same proportion as income, the quantity demanded of good x will: a. decrease. b. increase. c. remain unchanged. d. change in a way that cannot be determined from the information given. ANSWER: c POINTS: 1 2. Demand functions are "homogeneous of degree zero in all prices and income." This means: a. a proportional increase in all prices and income will leave quantities demanded unchanged. b. a doubling of all prices will not alter consumption decisions. c. prices directly enter individuals' utility functions. d. an increase in income will cause all quantities demanded to increase proportionately. ANSWER: a POINTS: 1 3. If income doubles and the quantity demanded of good x more than doubles, then good x can be described as a: a. substitute good. b. complement good. c. necessity. d. luxury. ANSWER: d POINTS: 1 4. If an individual buys only two goods and these must be used in a fixed relationship with one another (e.g., coffee and cream for a coffee drinker who never varies the amount of cream used in each cup), then: Copyright Cengage Learning. Powered by Cognero.
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