Suppose Consumer Income Increases

question 150

Multiple Choice

Suppose consumer income increases.If wine is a normal good, what will happen to the equilibrium price and producer surplus?

• A)both the equilibrium price and the producer surplus will decrease
• B)both the equilibrium price and the producer surplus will increase
• C)the equilibrium price will decrease and the producer surplus will increase
• D)the equilibrium price will increase and the producer surplus will decrease

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Definitions:

Allowance Factor

A factor used to calculate the amount of material needed considering waste or inefficiency, often in manufacturing or budgeting.

Standard Time

The established amount of time required to perform a specific task under normal conditions with average effort.

Performance Rating

An assessment of an individual's or machine's productivity level, often compared against a standard to gauge efficiency.

Observed Time

The actual amount of time measured for a task or process to be completed, as opposed to estimated or standard time.