The Demand Curve for Corn Is Downward Sloping

question 130

Multiple Choice

The demand curve for corn is downward sloping.If the price of corn, an inferior good, falls, then

• A)the income effect which causes you to reduce your corn purchases is smaller than the substitution effect which causes you to increase your corn purchases, resulting in a net increase in quantity demanded.
• B)the income effect which causes you to increase your corn purchases is larger than the substitution effect which causes you to reduce your corn purchases, resulting in a net increase in quantity demanded.
• C)both the income and substitution effects reinforce each other to increase the quantity demanded.
• D)the income and substitution effects offset each other but the price effect of an inferior good leads you to buy less corn.

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Definitions:

Capitalist Ideology

A belief system that supports the principles of capitalism, emphasizing private property, free markets, and the profit motive as key to economic development.

Chances of Success

The likelihood or probability that an individual or entity will achieve desired goals or outcomes, often influenced by various social, economic, and personal factors.

Blaming the Victim

The tendency to hold individuals responsible for the misfortunes that befall them, often ignoring external factors that may have contributed.

Deindustrialization

The transformation of an economy from one based on manufacturing to one based on services.