Sophia Micro economics Unit_2_Milestone

Sophia Micro economics Unit_2_MilestoneLaura was in charge of purchasing food for the next book club meeting. She usually ordered sandwiches from the nearby deli, but the price of sandwiches had increased. One option for food was ordering pizza, which was $3 less than a sandwich. However, because the price of sandwiches had gone up, Laura could afford fewer sandwiches and pizza than previous meetings. The reduction in Laura's ability to purchase both sandwiches and pizza due to the increase of price in sandwiches is known in economic terms as ________. a budget constraint a change in income the income effect the substitution effect CONCEPT Budget Constraints: Change in Price 2 Which of the following is true if two indifferences curves cross each other on a preference map? Sophia Micro economics Unit_2_Milestone 8/15/2020 Sophia :: Welcome The curves would represent two different individuals. If the curves are from the same rational individual, then they do not violate the assumptions of consumer choice theory. The curves are an example of consistent preferences. The curves are from the same rational individual. CONCEPT Consumer Choice Theory 3 Which statement below is true about the $75 Peter and his wife occasionally spend for two meals and drinks at a Korean barbecue restaurant since Peter was promoted, if the income elasticity for the expense is 2? It is a complement.