If a good is considered "inferior" then:
(a) As its price rises, less of it will be bought.
(b) As its price falls, more of it will be purchased.
(c) As the consumer's income increases less of the good is purchased.
(d) As the consumer's income increases more of the good is purchased.
Answer: (c) As the consumer's income increases less of the good is purchased.
You might also like to view...
Using the data in the above table, in the long-run macroeconomic equilibrium, the price level is ________ and the level of real GDP is ________
A) 115; $10 trillion B) 110; $10 trillion C) 105; $11 trillion D) 115; $11 trillion
A firm's profits will be greatest when it practices:
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) no price discrimination.
As used in this text, "autonomous" variables are
A) spontaneous variables that are completely unpredictable. B) completely independent of income, although they can be explained by movements in other variables. C) determined only by income levels. D) the same as endogenous variables.
John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?
A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. D) John's decision does not involve his pursuit of self-interest.