Assuming That Bus Travel Is an Inferior Good, an Increase

question 8

Multiple Choice

Assuming that bus travel is an inferior good, an increase in consumer income, other things being equal, will cause

• A) an upward movement along the demand curve for bus travel.
• B) a downward movement along the demand curve for bus travel.
• C) a rightward shift in the demand curve for bus travel.
• D) a leftward shift in the demand curve for bus travel.

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Definitions:

Unit Contribution Margins

The difference between the selling price per unit and variable cost per unit, indicating the contribution of each unit sold to covering fixed costs.

Fixed Costs

Expenses that do not change with the level of production or sales activities within a certain range or period.

Weighted Average

A calculation that takes into account the varying weights of different items in a dataset, commonly used in inventory costing.

Unit Selling Price

The price that a customer pays for one unit of a product or service.