Which Statement Is a CORRECT Description of the Law of Demand

question 21

Multiple Choice

Which statement is a CORRECT description of the law of demand?

• A) As prices of a good rise, the quantity supplied of that good rises.
• B) As prices of a good fall, the quantity demanded of that good rises.
• C) As prices of a good rise, the demand curve shifts to the left.
• D) There is a positive relationship between the price of a good and the quantity demanded.

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Definitions:

Marginal Tax Rate

The rate at which the last dollar of income is taxed, reflecting the rate applied to each additional dollar of income.

Net Pay

The amount of money an employee receives after deductions like taxes and social security charges are subtracted from the gross pay.

Laffer Curve

A representation of the relationship between rates of taxation and the resulting levels of government revenue that illustrates there can be an optimum tax rate that maximizes revenue.

Tax Revenues

The income that is collected by governments through taxation.