Marginal utility theory predicts that if a consumer's income decreases, the consumer
A) buys fewer normal goods.
B) buys fewer inferior goods.
C) buys more of all goods.
D) might either increase or decrease purchases of normal goods.
A
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Identify the non-price determinants that create changes in demand and can cause a shift in the demand curve
What will be an ideal response?
The government allowed the merger between Interstate Bakeries and Continental Bakery.
Answer the following statement true (T) or false (F)
The greater the area between the Lorenz curve and the diagonal in the Lorenz curve diagram, the:
A. smaller is the Gini ratio and the greater is the degree of income inequality. B. larger is the Gini ratio and the greater is the degree of income inequality. C. smaller is the Gini ratio and the lesser is the degree of income inequality. D. larger is the Gini ratio and the lesser is the degree of income inequality.
In general, the income effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income. B. will cause the individual to buy less of that good because they have relatively more income. C. will cause the individual to buy less of that good because they have relatively less income. D. will cause the individual to buy more of that good because they have relatively less income.