(Figure: Good Y and Good X VI) Assume That the Price

question 131

Multiple Choice

(Figure: Good Y and Good X VI) Assume that the price of Good X is $100 per unit and the price of Good Y is $100 per unit. When income increases from $1,200 to $1600, Good X is a (an) _____ good.

• A) necessity
• B) luxury
• C) inferior
• D) Giffen

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Definitions:

Monopolistically Competitive

A market structure where many firms sell products that are differentiated from one another but can act as substitutes, allowing for some control over pricing.

Shift To The Left

A term used in economics to describe a decrease in supply or demand, represented graphically by a leftward shift of the supply or demand curve.

Monopolistically Competitive

An economic setup in which a variety of businesses market goods that are comparable yet distinct, enabling them to have some market control and differentiate their offerings.

Guaranteed A Profit

An assurance that an investment or business endeavor will yield a positive return or profit.