Good X is a normal good if an increase in income leads to
A. a decrease in the supply for good X.
B. an increase in the demand for good X.
C. a decrease in the demand for good X.
D. an increase in the supply for good X.
Answer: B
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The Herfindahl-Hirschman Index is used to ________
A) measure the price elasticity of demand faced by a firm B) estimate the degree of competition in an industry C) measure the price elasticity of market supply in an industry D) estimate the profit earned by firms in an industry
According to the efficient markets hypothesis,
A) common stock prices should be constant. B) the price of a corporation's stock is likely to fluctuate substantially in response to news about changes in the company's short-term prospects. C) the price of a corporation's stock will fluctuate significantly only in response to news about changes in the company's long-term prospects. D) price fluctuations in common stock are a response to fads and are only infrequently the result of changes in the expected profitability of the companies involved.
The growth rate of per capita real Gross Domestic Product (GDP) is a reasonable measure of
A) the amount of money each person has. B) productive activity. C) personal well-being. D) quality of life.
Which of the following functions is not performed by prices in a free market?
a. guiding the allocation of resources b. conveying information about the marginal cost of production c. making the distribution of income more equitable d. replacing the need for governmental supervision of production