When a Consumer Experiences a Price Increase for an Inferior

question 92

Multiple Choice

When a consumer experiences a price increase for an inferior good,it is possible that the income effect is

• A) greater than the substitution effect,and the demand curve will be downward sloping.
• B) greater than the substitution effect,and the demand curve will be upward sloping.
• C) less than the substitution effect,and the demand curve will be upward sloping.
• D) less than the substitution effect but that the substitution effect is positive,and the demand curve will be upward sloping.

---

Definitions:

Work In Process Inventory

Work In Process Inventory comprises the materials, labor, and overhead costs for products that are partially completed in the manufacturing process.

Finished Goods Inventory

The total value of all completed products that are ready for sale but have not been sold yet, stored by a manufacturing company.

Cost Of Goods Sold

The expenses directly related to the manufacture of the products a company sells.

Product Costs

The total costs incurred to manufacture a product or provide a service, including direct materials, labor, and overhead expenses.