How would a decrease in consumer income affect the market for new automobiles, a normal good?
A. Demand would decrease, leading to an increase in price and a reduction in quantity sold.
B. Demand would decrease, leading to a reduction in price and a reduction in quantity sold.
C. Demand would increase, leading to an increase in price and an increase in quantity sold.
D. Demand would increase, leading to a reduction in price and an increase in quantity sold.
Answer: B
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Suppose an economy has the following characteristics: 100 people in the noninstitutional population; 60 people employed; 20 people not in the labor force. How many people are unemployed?
A) 20 B) 40 C) 60 D) 80 E) 100
The government might increase its spending to end a recession because:
A. allowing the short-run aggregate supply to adjust since back to the long-run can take a long time. B. the economy experiences lower prices at the long-run equilibrium. C. the economy enjoys a higher level of output in the long run. D. None of these justify why the government might change its spending to end a recession.
If a market is dominated by a few large, interdependent firms, it is said to be a(n)
a. oligopoly b. monopoly c. integrated monopoly d. monopolistically competitive market e. perfectly competitive market
An efficient allocation of resources is demonstrated by a point
a. above the production possibilities frontier. b. below the production possibilities frontier. c. on the production possibilities frontier. d. near the middle of the production possibilities frontier.