Refer to the Short-Run Information Provided in Figure 8

question 14

Multiple Choice

Refer to the short-run information provided in Figure 8.5 below to answer the question(s) that follow

Figure 8.5
-Refer to Figure 8.4. If six microwave ovens are produced, average variable costs are

• A) $50.
• B) $100.
• C) $150.
• D) $300.

---

Definitions:

Income Effect

The change in an individual's or an economy's consumption resulting from a change in real income.

Normal Good

A product whose demand increases as consumer income rises, indicating a direct relationship between income and demand for the good.

Income Effect

The change in an individual's or economy's consumption patterns resulting from a change in real income.

Substitution Effect

The financial concept stating that when prices increase or incomes drop, individuals will substitute higher-priced goods with more affordable options.