Suppose That the Incomes of Buyers in a Particular Market

question 87

Multiple Choice

Suppose that the incomes of buyers in a particular market for a normal good increase and there is also an increase in input prices. What would we expect to occur in this market?

• A) The equilibrium price would increase, but the impact on the amount sold in the market would be ambiguous.
• B) The equilibrium price would decrease, but the impact on the amount sold in the market would be ambiguous.
• C) Equilibrium quantity would increase, but the impact on equilibrium price would be ambiguous.
• D) Equilibrium quantity would decrease, but the impact on equilibrium price would be ambiguous.

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Definitions:

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Rules and standards set by governments or regulatory bodies to control and guide the operations, ethics, and practices of businesses within a jurisdiction.

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A method of dispute resolution where an impartial third party makes a decision to resolve the conflict, often used as an alternative to litigation.