For most goods, purchases tend to rise with increases in buyers' incomes and to fall with decreases in buyers' incomes. Such goods are known as:
A) inferior goods.
B) direct goods.
C) normal goods.
D) luxury goods.
Answer: C) normal goods.
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If the government increases spending but does not raise taxes
A) aggregate demand will increase without any effect on the price level. B) borrowing by the government will take place. C) the government will have to sell some assets, such as oil and national parks. D) the government will have to either lower expenditures or raise taxes the next year.
Marginal utility is negative when total utility is increasing
a. True b. False Indicate whether the statement is true or false
Historical data shows that if consumption increases by $80 billion when national income rises from $100 billion to $200 billion, then consumption will increase by less than $80 billion when national income rises from $200 billion to $300 billion
Indicate whether the statement is true or false
For a firm in a perfectly competitive market, if it is producing at a level of output where marginal costs are less than marginal revenue it:
A. is producing a profit-maximizing quantity. B. should invest more in advertising in order to raise revenues. C. should cut back production to increase profits. D. should increase production to increase profits.