A Consumer Choosing Between Apples and Oranges Is at Her

question 45

Multiple Choice

A consumer choosing between apples and oranges is at her best affordable point.Then the price of apples decreases.If both apples and oranges are normal goods,which one of the following statements is true about her new best affordable point?

• A)She will consume more apples and more oranges.
• B)She will consume more apples and fewer oranges.
• C)She will consume fewer apples and more oranges.
• D)She will consume fewer apples and fewer oranges.
• E)She will consume more apples,and we do not know whether she will consume more or less oranges.

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Definitions:

Modernization Theory

A theory which suggests that as societies undergo economic development, they will also experience cultural and social changes that lead them towards becoming more 'modern' or industrialized.

Industrialized Nations

Countries that have highly developed industries, infrastructure, and advanced technological capabilities, resulting in a high standard of living.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments determined by private decision, and by prices, production, and the distribution of goods determined mainly by competition in a free market.

Command Economy

An economic system where key economic decisions, such as allocation and distribution of resources, are made by the government.