When a Person Receives an Increase in Wealth,what Is Likely

question 17

Multiple Choice

When a person receives an increase in wealth,what is likely to happen to consumption and saving?

• A)Consumption increases and saving increases.
• B)Consumption increases and saving decreases.
• C)Consumption decreases and saving increases.
• D)Consumption decreases and saving decreases.

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Definitions:

Deadweight Loss

A loss in economic efficiency that can occur when equilibrium for a good or a service is not achieved or is not achievable.

Inverse Demand Function

A mathematical function that describes how the quantity demanded of a good or service varies with its price, expressed as price as a function of quantity demanded.

Inverse Supply

A concept in economics that represents the relationship between the price of a good and the quantity supplied by producers, but from the perspective of price as a function of quantity supplied.

Tax

A required monetary payment or different kind of tax levied on a taxpayer by government entities to finance government operations and public services.