If Income Decreases or the Price of a Complement Rises

question 124

Multiple Choice

If income decreases or the price of a complement rises

• A) the demand curve for a normal good shifts leftward.
• B) the demand curve for a normal good shifts rightward.
• C) there is an upward movement along the demand curve for the good.
• D) there is a downward movement along the demand curve for the good.

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Definitions:

Income Redistribution

The transfer of income from certain individuals or groups to others through mechanisms such as taxation, social security, or public spending, aimed at reducing inequality.

Economic Questions

Fundamental inquiries regarding the allocation of scarce resources, including what, how, and for whom to produce.

Utilitarian Justice

A principle that seeks the greatest good for the greatest number of people in the distribution of resources and benefits.

Decreasing Marginal Utility

The phenomenon where each additional unit of a good or service consumed provides less satisfaction or utility than the previous unit.