A Decrease in the Demand for a Product Will Cause

question 37

Multiple Choice

A decrease in the demand for a product will cause output of that product to

• A) increase and the demand for and prices of the resources used to produce the product to rise.
• B) decrease and both the demand for and prices of the resources used to produce the product to fall.
• C) decline; the demand for the resources used to produce the product will remain constant.
• D) increase; the price of resources used to produce the product will rise if their supply is elastic but fall if supply is inelastic.

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Definitions:

Drive Reduction

A theory in psychology that explains behavior as driven by the need to reduce internal tensions caused by unmet biological needs.

Incentives Necessary

The concept that motivation or behavior is influenced by a reward or incentive.

Ongoing Behavior

Behavior that is currently in process, continuing over a period of time.

Predictive Cues

Indicators or signals that suggest the likelihood of a future event or outcome.