When the Price of a Good Decreases

question 197

Multiple Choice

When the price of a good decreases:

• A) the quantity demanded increases.
• B) demand increases.
• C) the quantity supplied increases.
• D) supply increases.

---

Definitions:

Wage Rate

The fixed amount of compensation or payment made to an employee by an employer in return for work performed, typically expressed on an hourly, daily, or piecework basis.

Labor

The exertion of human energy, both bodily and cognitive, employed in generating goods and services.

Leisure

Free time when one is not working or occupied, which can be used for rest, entertainment, or activities one enjoys.

Nonlabor Income

Income received that is not related to wages or salaries, such as income from investments, pensions, or social security.