If the budget constraint crosses an indifference curve in two places, both these points will be below the consumer's optimal level of consumption.
Correct Answer:
Verified
Q29: The theory of consumer choice has limited
Q30: If two goods are perfect substitutes, their
Q31: For Giffen goods, the income effect dominates
Q32: All Giffen goods are also inferior goods.
Q33: The substitution effect and income effect always
Q35: An increase in income will cause the
Q36: The goal of a consumer can be
Q37: The income effect is the change in
Q38: Giffen goods are characterised by upward sloping
Q39: If a good is a perfect substitute,
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents