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Microeconomist: Usually, the relationship between the price

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Microeconomist: Usually, the relationship between the price [#permalink]

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25 Nov 2011, 14:37
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Microeconomist: Usually, the relationship between the price of a good and the demand for that product is negative: when the price goes up, the quantity demanded goes down, and vice versa. However, a dramatic increase in the price of basic foods, such as bread or milk, is likely to increase rather then decrease their consumption among the low-income households. Since the consumption of these products is relatively stable, an increase in their price will simply lower the proportion of the household’s budget spent on other, more expensive food items, such as meat or fish. In an effort to maintain the same calorie intake, the household will consume even more of the basic foods that typically remain a cheaper way to satisfy hunger even after an increase in their prices.

In the argument above, which of the following statements best describes the role played by each portion in boldface?

A)The first is evidence that the microeconomist provides in support of a certain prediction; the second is that prediction.
B)The first is a generalization that the microeconomist accepts as true; the second is a consequence that follows from that generalization.
C)The first is a pattern of cause and effect that the microeconomist predicts will not hold in the case at issue; the second offers a consideration in support of that prediction.
D)The first acknowledges a consideration against the main conclusion of the microeconomist; the second is that conclusion.
E)The first is a pattern of cause and effect that the microeconomist predicts will be repeated in the case at issue; the second acknowledges a circumstance in which that pattern would not hold.
[Reveal] Spoiler: OA

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Re: Microeconomist: Usually, the relationship between the price [#permalink]

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25 Nov 2011, 18:02
Please edit the post and indicate the bold portions .

Crick

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Re: Microeconomist: Usually, the relationship between the price [#permalink]

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13 Dec 2011, 01:17
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Re: Microeconomist: Usually, the relationship between the price   [#permalink] 13 Dec 2011, 01:17
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