Which of the Following Statements Is True

question 178

Multiple Choice

Which of the following statements is true?

• A)An increase in demand causes a change in equilibrium price; the change in price does not cause a further change in demand or supply.
• B)A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in demand.
• C)If both demand and supply increase there must be an increase in equilibrium price; equilibrium quantity may either increase or decrease.
• D)If demand decreases and supply increases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater.

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Definitions:

Personal Income

The total income received by individuals, including wages, salaries, government benefits, and income from investments.

Wage Supplements

Additional financial benefits provided to employees on top of their regular wages, which could include bonuses, health insurance, or retirement benefits.

Personal Income

The total earnings of an individual from wages, investment interests, and other sources before any deductions or taxes.

Lorenz Curve

A widely used graph of the distribution of income, with cumulative percentage of households plotted along the horizontal axis and cumulative percentage of income plotted along the vertical axis.