Questions 23 and 24 are worth 15 points each. Utility refers to a. the usefulness of a good. The substitution effect says that consumption of good B may increase or decrease. The income effect says that the consumer should consume more of both goods. The income effect outweighs the substitution effect.
Consumers spend less money on any good whose price has risen.
A consumer who is given enough additional money to purchase the original bundle will purchase more of a good that has become relatively cheaper. All of the above are true. The implicit cost associated with the use of an input refers to a. the explicit cost of the input. A sunk cost is a. a cost of an input used underground. Suppose that firms in a perfectly competitive industry are earning positive economic profit.