Consumers Buy Less of a Good as Its Price Increases

question 328

Multiple Choice

Consumers buy less of a good as its price increases because

• A) production costs have risen.
• B) substitute goods are now relatively cheaper.
• C) the income of consumers has effectively risen.
• D) the higher price will make the good more valuable to each consumer.

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Definitions:

Gamble

The act of risking something of value on the outcome of an event in the hope of gaining something of greater value.

Hypotheses Forming

The process of creating an educated guess or proposition that attempts to explain certain phenomena or relationships, which can be tested through research or experimentation.

Scene Identification

The cognitive process of recognizing and categorizing a visual environment or context in which an event takes place.

Functional Fixedness

A cognitive bias that limits a person to using an object only in the way it is traditionally used, hindering problem-solving abilities.