Consider the Market for High-End Wine

question 70

Multiple Choice

Consider the market for high-end wine.Statistics show that wealthier families spend a greater proportion of their income on high-end wine than do poorer families.If households' incomes rise substantially during an economic recovery,then we can expect

• A) an increased demand for high-end wine.
• B) an increased supply of high-end wine.
• C) a lower price for high-end wine.
• D) the demand curve for high-end wine to shift to the left.

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Definitions:

Production Function

An economic model that describes the relationship between the inputs used in production and the resulting output.

Factor 1

Represents the primary variable or input used in the production of goods or services, typically labor or capital.

Long-Run Cost Function

A representation of how the total production cost of a firm changes with output in the long run, when all inputs can be varied.

Positive Output

The production of goods or services in an amount greater than zero, indicating activity or productivity in economic terms.