Suppose that consumer income increases and that ground meat is an inferior good. Which of the following will occur in the market for ground meat?
A. Market clearing price will fall, and equilibrium quantity will rise.
B. Market clearing price will fall, and equilibrium quantity will fall.
C. Market clearing price will rise, and equilibrium quantity will fall.
D. Market clearing price will rise, and equilibrium quantity will rise.
Answer: B
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Refer to the table above. If the market is perfectly competitive, the equilibrium price of calculators is:
A) $2. B) $6. C) $12. D) $20.
A money supply increase in the New Keynesian model is not neutral because
A) consumers are fooled into working harder. B) the real interest falls, the quantity of output demanded rises, and firms supply more output. C) productivity rises, increasing output supply. D) bank lending rises.
When an American buys stock in a French company, from the perspective of the United States, this is a(n):
A. capital outflow. B. import. C. export. D. capital inflow.
If a positive permanent supply shock were to occur, the resulting equilibrium would be a:
A. higher level of output at lower prices. B. lower level of output and prices. C. higher level of output and prices. D. lower level of output at higher prices.