Pa. When consumer's income rises, what happens to the demand for pizza ?b. What happens to demand curve? Where is it shifted ?c. What happens to equilibrium price and quantity of Pizza, when consumer's income rises

05- Income and Substitution Effects Question 4

a. Describe according to demand theory why an inferior good or service you have consumed now or in the past is such. b. What do you expect would happen to your consumption of it when your income changed in either direction?

3. If the demand for a product is perfectly price inelastic, what does the corresponding price consumption curve look like? Draw a graph to show the price consumption curve.

Question 3

1. Which of the following is NOT true of a demand curve? a. It has negative slope. b. It shows the amount consumers are willing and able to purchase at various prices, holding other factors constant. c. It relates the price of an item to the quantity demanded of that item. d. It shows how an increase in price leads to an increase in quantity demanded of a good.

The law of demand implies, holding everything else constant, that as the price of pizza Select one: A. decreases, the demand for pizza will increase. B. decreases, the quantity of pizza demanded will decrease. C. decreases, the demand for pizza remains unchanged. D. increases, the demand for pizza will increase. E. increases, the quantity of pizza demanded will decrease.