A Commodity X will be considered as a normal good if:
a. the quantity of the good consumed decreases with an increase in income.
b. the quantity of the good consumed increases with an increase in income.
c. the quantity of the good consumed increases in the same proportion as the increase in income.
d. the quantity of the good consumed reflects no change with a change in income.
B
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The quantity of money people want to hold increases if
A) the price level falls. B) the nominal interest rate rises. C) real GDP increases. D) All of the above answers are correct.
Using the above table, if the price of Pepsi is $3, how many cans of Pepsi would have to be consumed in order to have a marginal utility to price ratio of 3?
A) one can
B) two cans
C) three cans
D) four cans
Romania has a comparative advantage in the production of
A. basketballs.
B. Barbie dolls.
C. both basketballs and Barbie dolls.
D. neither basketballs nor Barbie dolls.
Refer to the above table. Given the level of investment at $34 billion, zero net exports, and a lump-sum tax of $30 billion, the addition of government expenditures of $20 billion at each level of GDP will result in an equilibrium GDP of:
The data below is the consumption schedule in an economy. All figures are in billions of dollars.
A. $490 billion
B. $540 billion
C. $590 billion
D. $640 billion