As Macroeconomic Conditions Improve and Consumers' Incomes and Wealth Increase,their

question 36

Multiple Choice

As macroeconomic conditions improve and consumers' incomes and wealth increase,their demand for many products tends to become ________ price inelastic.As such,the ability of firms to mark up price above cost will ________.

• A)more; increase
• B)more; decrease
• C)less; increase
• D)less; decrease

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Definitions:

Utility Function

A formula that represents a consumer’s preference ranking for different combinations of goods or services, indicating the total satisfaction achieved from consumption.

Competitive Market

A market structure characterized by a large number of buyers and sellers, with no single participant able to significantly influence the market price.

Coconuts

In economic models or exercises, often used as a commodity or goods to demonstrate concepts of trade, barter, or economic principles more simplistically.

Fish

Aquatic cold-blooded vertebrates typically covered with scales and equipped with fins, serving as a significant food source, recreational sport, and economic commodity worldwide.