Question

e. For each of the following, choose “income only”, “substitution only”, or “income and substitution effects.”

1. The ORDINARY demand curves show which effect(s) of a change in price on purchases of X?___________________________________

2. The COMPENSATED demand curve shows effect(s) of a change in price on purchases of X?___________________________________

f. For each of the following, choose “ordinary only”, “compensated only”, or “both ordinary and compensated.”

1.A change in utility will shift which demand curve(s)?___________________________________

2. A change in income will shift which demand curve(s)?

Answer 1

1.The ORDINARY demand curves show which effect(s) of a change in price on purchases of X?

Ans: Income and substitution effects

2. The COMPENSATED demand curve shows effect(s) of a change in price on purchases of X?

Ans: Income Effect

.1.A change in utility will shift which demand curve(s)?

Ans: Compensated Only

2. A change in income will shift which demand curve(s)?

Ans: Compensated Only