When Income Decreases, All Else Held Constant, Which of the Following

question 61

Multiple Choice

When income decreases, all else held constant, which of the following occurs?

• A)Demand for an inferior good decreases.
• B)The slope of the highest attainable indifference curve changes.
• C)The budget line shifts out from the origin.
• D)Total utility decreases.
• E)Total utility increases.

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Definitions:

JIT

Just-In-Time, a management strategy that aligns raw-material orders from suppliers directly with production schedules to improve efficiency and decrease waste.

Spread

Spread can refer to the difference between the bid and ask prices of financial instruments or the difference between interest rates on two different investments.

Trade Credit

A business arrangement where a buyer is allowed to purchase goods or services and pay the supplier at a later scheduled date, often used to finance short-term operational needs.

Consumer Credit

A type of credit granted to consumers to finance personal purchases.