If resources R1 and R2 are substitutable, the decrease in price of R1 will Select one: Increase the demand for R2 Increase the demand for R2 if the substitution effect exceeds the output effect None of the answers are correct Increase the demand for R2 if the output effect exceeds the substitution effect Decrease the demand for R2

Macroeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506756
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter3: Demand, Supply, And The Market Proces
Section: Chapter Questions
Problem 15CQ
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If resources R1 and R2 are substitutable, the decrease in price of R1 will

Select one:

  1. Increase the demand for R2
  2. Increase the demand for R2 if the substitution effect exceeds the output effect
  3. None of the answers are correct
  4. Increase the demand for R2 if the output effect exceeds the substitution effect
  5. Decrease the demand for R2
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