When the Price of a Good Increases,all Else Equal,the Higher

question 56

Multiple Choice

When the price of a good increases,all else equal,the higher price

• A)reduces the consumer's set of buying opportunities.
• B)leads to a parallel shift of the linear budget constraint.
• C)will necessarily lead to an increase in the consumption of goods whose price did not change.
• D)generally discourages the consumption of inferior goods.

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Definitions:

Limited Resources

The economic principle that the available resources (such as time, money, and raw materials) are insufficient to satisfy all wants and needs.

Unlimited Wants

The economic concept that human desires and needs are infinite and vary in intensity, contrasting with limited available resources.

Normative

In economics and philosophy, refers to statements or propositions that express values, ethics, or moral prescriptions, indicating how things ought to be.

Positive

Characterized by or indicating the presence or affirmative action of a feature, condition, or outcome.