An increase in household income for a good that is considered normal would
A. cause a movement along the demand curve to a (higher price, lower quantity) point.
B. move its demand curve to the right.
C. move its demand curve to the left.
D. cause a movement along the demand curve to a (lower price, higher quantity) point.
Answer: B
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Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. For Jerry, the opportunity cost of building a fence is ________ dishes made.
A. 7 B. 4 C. 14 D. 2
A lower price elasticity of demand coefficient occurs when:
a. many substitutes exist. b. the quantity demanded is more responsive. c. few substitutes exist. d. the market is broadly defined.
If demand is price elastic, then when price decreases, total revenue
a. decreases b. increases c. does not change d. is less than one e. is negative
A cartel maximizes industry profit by
a. eliminating quotas b. producing at the kink in its demand curve c. producing where MR = MC d. cutting production costs to become more efficient e. producing more output than a monopoly would