A3 Following an increase in the price of Good X, what economic concept is being illustrated in the diagram below by the vertical distance Z? Money Good> income effect compensating variation equivalent variation none of the above A4. Mr Mono has a current income of $100 and a future income of $110. Which of the following represents the present value of his income endowment if the rate of interest is 3%? A. E127.50 B. 1206.80 E213.00 none of the above A5. Within a two-period intertemporal choice setting, a consumer chooses to be a saver al an initial market rate of interest. Which of the following best describes what happens when the rate of interest increases? A the income and substitution effects on current consumption will always move in the same direction B the income and substitution effects on current consumption will always move in opposite directions C. the income effect on current consumption will never be larger than the substitution effect D. none of the above