Good Y Is an Inferior Good

question 206

Multiple Choice

Good Y is an inferior good.If the average income of those who buy good Y rises,the _____________ curve for good Y will shift ____________ resulting in a(n) _____________ in the equilibrium price of Y and a(n) ____________ in the equilibrium quantity of Y.

• A) supply; rightward; decrease; increase.
• B) demand; leftward; decrease; decrease
• C) demand; rightward; increase; increase
• D) supply; leftward; increase; decrease
• E) supply; leftward; increase; increase

Analyze the significance of the Coase theorem in resolving externality issues without government intervention.

Interpret market diagrams to analyze shifts in supply and demand due to government policies or externalities.

Understand the effect of pollution abatement on social welfare and resource allocation.

Assess the implications of under- or overallocation of resources to public goods and externalities.

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Definitions:

Respondent Behavior

Behavior that occurs as a direct response to a specific stimulus without conscious thought.

Spontaneous Recovery

In psychology, the reappearance of a conditioned response after a delay or period of extinction.

Consistent

Showing steady conformity to character, profession, belief, or custom.

Experiments

Research methods employed to explore, verify a hypothesis, or prove an established truth.