Which of the following does NOT occur when the price of a good increases?
A. The good becomes more expensive relative to all other goods.
C. Consumers shift their purchases away from the more expensive good.
D. The consumer is effectively poorer than before the increase in price.
B. The consumer's purchasing power increases.
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The 1920s was a period of alcohol prohibition in the United States. During the 1920s,
A) the purchase and sale of alcohol was illegal. B) people coordinated their alcohol production and consumption activities in illegal, underground markets. C) the supply of alcohol became quite inelastic. D) all of the above were true. E) none of the above were true.
Everything else held constant, a decrease in autonomous consumer spending will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
In 1970 the Social Security tax rate was ______ and had increased to ______ by 2012.
A. 0.84%; 0.124% B. 12.4%; 8.4% C. 8.4%; 12.4% D. 84%; 124%
Explain the concept of liquidated damages with an example