A "normal good" is defined as any good in which
A) a rise in its price will reduce quantity demanded.
B) a fall in its price will increase quantity demanded.
C) a rise in income will reduce overall demand.
D) a fall in income will reduce overall demand.
D
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If the market for a good or service is competitive,
a. there are many independent buyers and sellers b. buyers and sellers have no control over price c. there are no entry barriers d. all of the above
A rent ceiling set below the equilibrium rent
A) ensures the availability of enough low-rent apartments in a city. B) results in all renters and potential renters being better off. C) creates a situation in which the quantity demanded of housing is greater than quantity supplied. D) ensures that landlords earn a reasonable rate of profit on apartments. E) eliminates discrimination by landlords.
According to the theory of cost, specialization in the use of variable resources in the short-run results initially in:
a. decreasing returns and declining average and marginal costs b. increasing returns and declining average and marginal costs c. increasing returns and increasing average and marginal costs d. decreasing returns and increasing average and marginal costs e. none of the above
Which of the following statements is always true? a. An increase in price will lead to an increase in producer surplus along a supply curve. b. An increase in price will lead to an increase in consumer surplus along a demand curve. c. A price ceiling will lead to an increase in consumer surplus
d. A price floor will lead to an increase in consumer surplus.