Question

For the following questions, specify if the statement is True/False/Uncertain and argue why you think so. Your justification is much more important than the answer you give (T/F/U), and must involve verbal descriptions, graphs, or equations.

1、In a two-good world, at least one good must be normal.(such as normal goods and inferior goods)

2、Simultaneous increases in the first-class postage rate from 20 to 30 cents and the overnight delivery rate from $1.00 to $1.10 will leave unaltered the proportion in which the two types of mail are consumed.

That is all information ,thank you

Answer 1

1、In a two-good world, at least one good must be normal.(such as normal goods and inferior- True

If there are only two goods and both are inferior goods, the rise in income of an individual will lead to a decrease in purchase of both the goods.

2.It is False ,since , due to rise in rate of overnight delivery rate. Those who find it expensive may shift to first class postage as it is still cheaper. It will not leave the proportion in which two typpes of good are consumed unaltered.