True or false question related to consumer behavior for changes in income and changes in price.
Mike spends all his income on tennis balls and basketball tickets. His demand curve for tennis balls is elastic. Tr«, or false: If the price of tennis balls rises, he consumes more tickets. Explain.
At current cost, housing costs $50 each unit also the composite good has a price of $1 per unit. A wealthy benefactor has given Joe, a penniless person, 1 unit of housing and 50 units of the composite good. Now the price of housing falls by half. True or false: Joe is necessarily better off as a result of the price change. Explain