The final consumer demand for chicken (normal good) in China will NOT shift if
A. consumer income decreases.
B. more consumers are present in the market.
C. the price of chicken decreases.
D. either A or B occurs.
Ans: C. the price of chicken decreases.
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The owners will shut down a perfectly competitive firm if the price of its good falls below its minimum
A) average total cost. B) average marginal cost. C) average variable cost. D) wage rate.
Refer to Figure 16-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) decrease government purchases B) increase income taxes C) sell Treasury bills D) increase government purchases
Government expenditures are larger than government outlays
a. True b. False
Under cost-plus regulation, a regulated firm is permitted to charge prices that cover the explicit cost of production plus a markup to cover the:
A. cost of winning a government contract. B. extra cost associated with the state ownership of natural monopolies. C. owner's economic rent. D. opportunity cost of the resources supplied by the firm's owners.