The discussion of Figure 2.2 in the text indicates that quantity demanded for most goods tends to increase as income rises. However, the quantity of bananas demanded in the U.S. tends to decrease as income rises
Under this condition, we expect that an increase in consumer income shifts the demand curve for bananas: A) rightward
B) no shift.
C) leftward.
D) upward.
C
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Using the money demand and money supply model, an open market sale of Treasury securities by the Federal Reserve would cause the equilibrium interest rate to
A) not change. B) increase, then decrease. C) increase. D) decrease.
For a natural monopoly, long-run average costs
A) fall as output increases. B) rise as output increases. C) fall as output falls. D) rise as output falls.
The argument that concentration of market power enhances research and development efforts may be weak because
A. No existing monopoly has a research and development program. B. Monopolies cannot afford basic research. C. A monopoly may have no clear incentive to pursue new research and development. D. No one has attempted to gather any empirical evidence.
If a profit-maximizing competitive firm ________ compensate society for a negative externality, the firm will choose to produce where price equals marginal cost.
A. is pressured to B. does not have to C. voluntarily chooses to D. is legally bound to