Question

35 Assume a college student purchases only Soft Drinks and Burgers. The substitution effect of an increase in the price of burgers will result in:

A A decrease in the consumption of burgers and an decrease in the consumption of soft drinks.
B A decrease in the consumption of burgers and an increase in the consumption of soft drinks.
C A decrease in the consumption of burgers and no change in the consumption of soft drinks.
D A decrease in the consumption of soft drinks only.


36 Assume that a college student purchases only Red Bull and Mars bars The substitution effect associated with a decrease in the price of a Mars will result in:

A an increase in the consumption of Mars and an increase in the consumption of Red Bull.
B an increase in the consumption of Mars and a decrease in the consumption of Red Bull .
C only a decrease in the consumption of Red Bull .
D only an increase in the consumption of Mars .

Answer 1

35:
B A decrease in the consumption of burgers and an increase in the consumption of soft drinks.

36:
B an increase in the consumption of Mars and a decrease in the consumption of Red Bull .