If We Observe a Fall in the Equilibrium Price of Good

question 14

Multiple Choice

If we observe a fall in the equilibrium price of good A,we know that either the demand for A has

• A)increased or the supply of A has decreased or both.
• B)increased or the supply of A has increased or both.
• C)decreased or the supply of A has increased or both.
• D)decreased or the supply of A has decreased or both.
• E)none of the above.

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Definitions:

Isolated Cases

Instances or occurrences that are distinct from and not representative of the general situation or condition.

Fast And Frugal Heuristics

Decision-making strategies that use minimal information to make quick and efficient decisions.

Gigerenzer

A psychologist known for his work on heuristics and decision making under uncertainty.

Cognitive Power

Refers to the capacity of the brain to perform higher mental processes of reasoning, remembering, understanding, and problem-solving.