Use the Figure Below to Answer the Following Question(s)

question 139

Multiple Choice

Use the figure below to answer the following question(s) . Figure 3-3
In Figure 3-3, if the initial demand for margarine were D₁, the impact of a decrease in the price of butter, a substitute good for margarine, would be illustrated as

• A) a shift in the demand curve to D₂.
• B) a shift in the demand curve to D₃.
• C) a movement downward to the right along the original demand curve D₁.
• D) none of the above.

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Definitions:

Prices

The amounts of money required to purchase goods or services, setting the economic value of said goods or services in the market.

Consumption Bundle

A combination of goods and services that a consumer chooses to consume.

Subsidy

Financial support given by the government or a public body to assist an industry or business so that the price of a commodity or service may remain low or competitive.

Housing

Refers to the construction and assignment of houses or buildings for the purpose of providing shelters or places to live.