When the Price of a Good Increases, It

question 87

Multiple Choice

When the price of a good increases, it

• A)leads suppliers to place few goods on the market.
• B)the demand for the good shifts.
• C)leads consumers to want to buy more or less than before at a given price.
• D)a movement down along the demand curve will occur.

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Definitions:

Moral Hazard

Moral hazard refers to a situation where one party is more likely to take risks because they do not have to bear the full consequences of their actions, often due to asymmetrical information or a disconnect between action and responsibility.

Fire Prevention Program

A fire prevention program includes strategies and activities aimed at reducing the incidence and severity of uncontrolled fires.

Insurer

A company or entity that provides coverage, typically in the form of compensation resulting from loss, damage, illness, or death, in exchange for premium payments.

Principal-Agent Problem

A situation in which there is a conflict of interest between a principal (such as an owner or shareholder) and an agent (such as a manager or employee) because the agent is motivated to act in their own best interests rather than those of the principal.