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30. Suppose the demand for a product is such that the SE of a price change is equal to 0. Under which of the following conditions will the law of Demand be violated?

A. The product is a normal good.

B. The product is an inferior good.

C. The IE is < 0.

D. The IE is < 3.

E. None of the above is true.

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Chika Ilonah
Chika IlonahLv10
28 Sep 2019

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Related questions

15. (From Web Quiz) Which of the following statements is correct about the Income Effect (IE) and the Substitution Effect (SE) of a change in the price of Good X: a) If IE and SE work in the same direction, then X is an inferior good b) If IE and SE work in opposite directions, then X is a normal good c) If IE and SE work in opposite directions, then X could have downward-sloping demand * d) If IE and SE work in the same direction, then X could have upward-sloping demand e) All of a) through d) are incorrect.

If the demand for a good increases when people's incomes increase, ___________
a. the good is an inferior good.
b. the law of demand is violated.
c. the good's demand curve must be slope upward.
d. the good is a normal good.
e. the good is a substitute good for an inferior good.

Consider the following statements about demand curves, normal and inferior goods, and substitution, income, and gross effects. Evaluate whether each statement is true or false, explaining why you reach this conclusion. (a) All inferior goods are Giffen goods. (b) All Giffen goods are inferior goods. (c) A good x that has a downward-sloping demand curve must be a normal good. (d) Any good x that has a downward-sloping demand curve must have a substitution effect that is larger in absolute value than the income effect (that is, |SE| > |IE|). (e) When Px falls, the substitution effect on x is larger in size if x is a normal good than if x is an inferior good.

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