If a Decrease in Income Increases the Demand for a Good,then

question 29

Multiple Choice

If a decrease in income increases the demand for a good,then the good is a(n)

• A)substitute good.
• B)complementary good.
• C)normal good.
• D)inferior good.

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Definitions:

Implicit Costs

The opportunity costs that are not directly paid for in cash but represent the loss of alternative benefits when resources are used for a particular purpose.

Explicit Costs

Direct, out-of-pocket payments for goods and services that are used in the production of other goods or services.

Accounting Profit

The financial profit of a business calculated by subtracting total expenses from total revenue, as shown in the company's income statement.

Economic Profit

A measure of profitability calculated by subtracting both explicit and implicit costs from total revenues, reflecting the true economic performance of a business.