Assume That Automobiles Are a Normal Good

question 71

Multiple Choice

Assume that automobiles are a normal good. A decrease in income will

• A) shift the marginal revenue product curve of auto workers to the left.
• B) move a firm up the marginal revenue product curve of auto workers.
• C) shift the marginal revenue product curve of auto workers to the right.
• D) have no effect on the marginal revenue product curve of auto workers.

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Definitions:

Fixed Proportions Technology

Fixed proportions technology is a production process where inputs must be used in strict, fixed ratios to produce outputs, with no possibility of substitution between inputs.

Pollution

The presence of substances in the environment that are harmful to human health, natural ecosystems, or the climate.

Output

The total amount of products or services produced by a company, industry, or economy.

Marginal External Costs

The additional cost imposed on third parties not involved in a transaction or decision, for each additional unit produced or consumed.