Question : 92) The income effect of an increase in the price : 1387697

92) The income effect of an increase in the price of peaches is

A) the change in the quantity demanded of peaches that results from the price increase making peaches more expensive than other fruit, holding constant the effect of the price change on consumer purchasing power.

B) the change in the demand for peaches as a result of the change in the price of peaches, holding all other factors constant.

C) the change in the quantity demanded of other fruit that results from the impact of the price change on purchasing power, holding all other factors constant.

D) the change in the quantity demanded of peaches that results from the effect of the change in price on consumer purchasing power, holding all other factors constant.

93) The substitution effect of an increase in the price of peaches is

A) the change in the quantity demanded that results from a change in the price of peaches making peaches more expensive relative to other goods, holding constant the effect of the price change on consumer purchasing power.

B) the change in the demand for nectarines (a substitute good) that results when peaches become more expensive relative to nectarines, holding constant the effect of the price change on consumer purchasing power.

C) the change in the quantity demanded of peaches that results from the effect of the change in the price of peaches on the consumer’s purchasing power.

D) the change in the demand for peaches that results when the price of peaches increases.

94) The French Bakery ran a special which decreased the price of its croissants from $1.50 to $1.00. Although her money income had not changed, Toni decided to buy 2 croissants instead of her usual 1 bagel and 1 croissant. Toni’s actions are explained by which of the following?

A) income effect only or substitution effect only but not both effects

B) income and substitution effects

C) price effect

D) consumption effect

95) The income effect of a decrease in the price of legal services, a normal good, results in

A) a decrease in the demand for legal services.

B) a decrease in the quantity demanded of legal services.

C) an increase in the quantity demanded of legal services.

D) an increase in the demand for legal services.

96) A change in the price of a good has two effects on the quantity consumed. What are these effects?

A) the income effect and the substitution effect

B) the utility effect and the budget effect

C) the total utility effect and marginal utility effect

D) the consumption effect and expenditure effect

97) If you received negative marginal utility from consuming the 4th slice of pizza, then your total utility from 4 slices of pizza must be less than your total utility from 3 slices of pizza.

98) When diminishing marginal utility sets in, total utility must be negative.

99) A consumer maximizes her total utility from a bundle of goods when her marginal utility from each good is equal.

100) The economic model of consumer behavior explains how consumers’ tastes and preferences are formed.

101) The income effect of a price increase causes a decrease in the quantity demanded of a normal good.