For 8 Substitution effect induce lobster decrease and chicken increase.Income effect induce lobster decrease and chicken decrease. The answer should be D?10Same with 8. We always need to consider substitution and income effect shouldn't we?11 Same with 8. We always need to consider substitution and income effect shouldn't we?

tax policy aimed at increasing saving Wo Quick Quiz 8. Mr. Burns buys only lobster and chicken. Lobster 10. Maude's labor-supply curve slopes upward if, for is a normal good, while chicken is an inferior good. Maude, a. leisure is a normal good. When the price of lobster rises, Mr. Burns buys a. less of both goods. S. E x x y p b. consumption is a normal good. b. more lobster and less chicken. c. the income effect on leisure exceeds the c. less lobster and more chicken. substitution effect. d. less lobster, but the impact on chicken is d. the substitution effect on leisure exceeds the ambiguous. income effect. 9. If Edna buys more pasta when the price of pasta 1 1. Consumption when young and consumption when increases, we can infer that for Edna old are both normal goods for Seymour, a worker a. pasta is a normal good for which the income saving for retirement. When the interest rate falls, effect exceeds the substitution effect. what happens to Seymour's consumption when old? b. pasta is a normal good for which the substitution a. It definitely increases. J effect exceeds the income effect. b. It definitely decreases. c. pasta is an inferior good for which the income C. It increases only if the substitution effect exceeds effect exceeds the substitution effect. the income effect. d. pasta is an inferior good for which the d. It decreases only if the substitution effect substitution effect exceeds the income effect. myenos es exceeds the income effect. Answers at end of chapter