If an Increase in a Consumer's Income Causes the Consumer

question 44

Multiple Choice

If an increase in a consumer's income causes the consumer to decrease her quantity demanded of a good, then the good is

• A) a substitute good.
• B) a normal good.
• C) a complementary good.
• D) an inferior good.

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Definitions:

Economic Outcome

The result of economic activities, often measured by metrics such as GDP growth, unemployment rates, and inflation.

Marginal Rate Of Technical Substitution

The rate at which one input can be reduced per additional unit of another input, while maintaining the same level of output.

Efficiency

The optimal use of resources to achieve the desired ends, minimizing waste and maximizing output.

General Equilibrium Prices

The set of prices for all goods and services in an economy at which supply and demand across all markets are in balance.