If the price of a normal good falls, what happens to the quantity demanded of that good?
What will be an ideal response?
If the price of a normal good falls, the quantity demanded of that good increases because the substitution effect and the income effect both bring an increase in the quantity demanded.
You might also like to view...
The t-statistic has the following distribution:
A) standard normal distribution for n < 15 B) Student t distribution with n–1 degrees of freedom regardless of the distribution of the Y. C) Student t distribution with n–1 degrees of freedom if the Y is normally distributed. D) a standard normal distribution if the sample standard deviation goes to zero.
An example of a(n) ________ comparative advantage is that some U.S. consumers prefer German beer over American beer because German beer has a reputation for tasting better.
A. unwarranted B. acquired C. subsidized D. natural
Refer to Figure 2-4. Consider the following movements:
a. from point V to point W b. from point W to point Y c. from point Y to point Z Which of the movements listed above represents advancements in technology with respect to only plastic production? A) a, b, and c B) b and c only C) b only D) c only
A production indifference curve is sometimes called “isoquants” since the term implies equal quantities of output.
Answer the following statement true (T) or false (F)