Assume That Brand X Is an Inferior Good and Name

question 355

Multiple Choice

Assume that brand X is an inferior good and name brand Y is a normal good. An increase in consumer income, other things being equal, will cause a(n) :

• A) upward movement along the demand curve for name brand Y.
• B) downward movement along the demand curve for brand X.
• C) rightward shift in the demand curve for brand X.
• D) leftward shift in the demand curve for brand X.

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Definitions:

Steady Flow

implies a constant and uniform rate of flow in processes, often used in the context of fluid dynamics and economic models.

Debt Covenants

Provisions agreed upon in debt contracts that place restrictions or obligations on the borrower to either do or not do certain actions.

Default Risk

The risk that a borrower will not make the required payments on their debt obligations.

Creditors

Individuals or institutions that lend money or extend credit to others, expecting repayment in the future.