If Income Increases and the Demand for Bus Rides Decreases

question 314

Multiple Choice

If income increases and the demand for bus rides decreases,

• A) bus rides are a normal good.
• B) consumers are behaving irrationally.
• C) bus rides are an inferior good.
• D) bus rides are a substitute good.
• E) bus rides must be a complement good with some other good.

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Definitions:

S-corp

A special designation for a corporation in the United States that allows profits and losses to be passed through to shareholders to avoid double taxation on corporate income.

C-corp

A type of corporation in the United States that is taxed separately from its owners, as defined under subchapter C of the Internal Revenue Code.

Investment

The allocation of resources, usually money, with the expectation of generating an income or profit.

Dividends

A portion of a company's earnings that are distributed to shareholders, usually on a quarterly basis.