Use the Information Below to Answer the Following Questions

question 116

Multiple Choice

Use the information below to answer the following questions.
Fact 3.5.1
The market for coffee is initially in equilibrium.Pepsi is a substitute for coffee;cream is a complement of coffee.Consider the market for coffee.Assume that all ceteris paribus assumptions continue to hold except for the event listed.
-Refer to Fact 3.5.1.If coffee is a normal good,then a decrease in income will

• A)increase the price and the quantity demanded of coffee.
• B)increase the price and the quantity supplied of coffee.
• C)decrease the price and the quantity demanded of coffee.
• D)decrease the price and the quantity supplied of coffee.
• E)have no effect on the market for coffee.

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Definitions:

Duress

A condition where a person performs an act as a result of violence, threat, or other pressure against them, raising questions about the voluntariness of the act.

Voidable

Capable of being made void; not utterly null, but annullable, and hence that may be either voided or confirmed. See also void.

Capacity To Contract

The legal ability of a party to enter into a contract, typically requiring that the person is of legal age and sound mind.

Oral Contract

A verbal agreement between parties that is legally binding, though harder to prove than written contracts.