An economist for a bicycle company predicts that, other things equal, a rise in consumer incomes will increase the demand for bicycles. This prediction assumes that:
A. there are many goods that are substitutes for bicycles.
B. there are many goods that are complementary to bicycles.
C. there are few goods that are substitutes for bicycles.
D. bicycles are normal goods.
Answer: D
You might also like to view...
What are the requirements for perfect competition?
What will be an ideal response?
What is the problem with the argument that infant industries need to be protected from foreign competition?
What will be an ideal response?
If prices of both horizontal and vertical goods decrease by 50%,
A) budget constraint will be unchanged. B) slope of the budget constraint will increase. C) slope of the budget constraint will decrease. D) budget constraint will shift outward in a parallel fashion.
When two goods are substitutes, their cross price elasticity of demand
A) infinity. B) 0. C) negative. D) positive.