A Theory Asserts That Consumers Will Purchase Less of a Good

question 242

Multiple Choice

A theory asserts that consumers will purchase less of a good at higher prices than they will at lower prices. However, when the average price of cars increased throughout the 1990s, more cars were purchased. Which of the following explanations of the apparent conflict between theory and data is most accurate?

• A) The price and quantity data gathered by researchers was clearly measured incorrectly.
• B) It is likely that variables other than the price and quantity of cars demanded were changing.
• C) The ceteris paribus assumption is valid.
• D) The theory must be invalid.

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Definitions:

IPSPs

Inhibitory postsynaptic potentials, a kind of synaptic potential that makes a postsynaptic neuron less likely to generate an action potential.

Action Potentials

Rapid, temporary changes in the electrical charge of a cell's membrane, allowing for the transmission of signals along neurons.

Graded Potentials

Changes in membrane potential that vary in size and do not follow the all-or-none principle, important in the initiation of action potentials.

Sodium-Potassium Pump

A vital cell membrane protein that exchanges sodium for potassium across the plasma membrane, critical for cellular functions.