Assume the Demand Curve for Shampoo Is Downward Sloping

question 366

Multiple Choice

Assume the demand curve for shampoo is downward sloping. If the price of shampoo falls from $1.50 to $1.25 per bottle,

• A) the demand for shampoo will fall.
• B) the demand for shampoo will rise.
• C) a larger quantity of shampoo will be demanded.
• D) a smaller quantity of shampoo will be demanded.

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Definitions:

Compensating Differential

The additional amount of income that an employee requires to accept a job that entails less desirable aspects, such as longer hours or higher risks.

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, skills, health, and other things employers value such as loyalty and punctuality.

Unskilled Labor

Labor that requires no specialized skills, education, or training for its performance.

Productivity Gains

Increases in the amount of output produced per unit of input, reflecting improvements in efficiency, technology, or processes.