If an Increase in the Supply of Good a Decreases

question 105

Multiple Choice

If an increase in the supply of good A decreases the demand for good B, then

• A)the demands for A and B are independent.
• B)the elasticity of supply for good A is greater than 1.
• C)A and B are complements.
• D)A and B are substitutes.
• E)the demand for A is price elastic.

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Definitions:

Income Inequality

The unequal distribution of household or individual income across the various participants in an economy.

Household Income

The combined gross income of all members of a household, typically measured over a set period of time, such as a month or a year.

Taxes

Compulsory financial charges imposed by a government on individuals, corporations, or transactions to fund public services and government activities.

Transfer Payments

Monetary payments made by governments that do not correspond to the provision of goods or services in exchange, such as welfare benefits.