When the Supply of Good a Decreases

question 61

Multiple Choice

When the supply of good A decreases,

• A)the equilibrium price and the equilibrium quantity will increase.
• B)the equilibrium price will increase,but the equilibrium quantity will decrease.
• C)the equilibrium price and the equilibrium quantity will decrease.
• D)the equilibrium price will decrease,but the equilibrium quantity will increase.
• E)a surplus will result.

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Definitions:

Marginal Utility

The extra pleasure or benefit a customer gets from purchasing an additional unit of a product or service.

Utility

The satisfaction or benefit derived by consuming a product or service.

Objectively Determined

Describes a value or decision made based on factual and unbiased criteria, removing personal feelings or opinions.

Indifference Schedule

An indifference schedule is a table or graph representing combinations of two goods among which a consumer is indifferent, showing how much of one good the consumer is willing to give up to obtain more of the other good.