Mr. Burns buys only lobster and chicken. Lobster is a normal good, while chicken is an inferior good. When the price of lobster rises, Mr. Burns buys
a. less of both goods.
b. more lobster and less chicken.
c. less lobster and more chicken.
d. less lobster, but the impact on chicken is ambiguous.
Ans: c. less lobster and more chicken.
You might also like to view...
Which of the following statements is NOT compatible with explanations for why peak-load pricing is more profitable than charging a single price?
A) Consumer willingness to pay for the product varies a lot across different time periods. B) Marginal cost of production is much higher under peak demand. C) Marginal revenue changes a lot across different time periods. D) Marginal revenue must be the same across different time periods.
In the supply curve, the relationship between price and quantity supplied is
a. inverse. b direct. c. nonexistent. d. not determined.
Critics argue that firms use advertising to develop consumer preferences
a. True b. False Indicate whether the statement is true or false
The amount of goods and services that a person can produce in a given time is called
a. labor input b. labor intensive c. labor output d. labor productivity