A normal good is defined as a good
A) for which demand increases when income increases.
B) with a downward sloping demand curve.
C) for which demand increases when the number of demanders increases.
D) for which demand increases when the price of a substitute rises.
E) for which demand increases when the price of a complement falls.
A
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The opportunity cost of an action:
a. is equal to the marginal cost of an action b. is equal to explicit cost c. is equal to the cost of the next best alternative forgone d. is the total cost of an action
One reason why there may be a bias against free trade is that
a. transportation costs are too high b. absolute advantage may outweigh comparative advantage c. those who benefit from trade have little incentive to lobby for it d. the terms of trade may be too high e. people prefer importing to exporting
Monopolists are price
A. Takers, as are competitive firms. B. Makers, but competitive firms are price takers. C. Makers, as are competitive firms. D. Takers, but competitive firms are price makers.
The economy characterized by the data is:
A. experiencing inflation because disposable income exceeds personal income.
B. experiencing declining production capacity because net investment is negative.
C. in a depression because personal income exceeds disposable income.
D. experiencing expanding production capacity because net private domestic investment is
positive.