Suppose the Price of Good X Falls and the Consumption

question 236

Multiple Choice

Suppose the price of good X falls and the consumption of good X increases.From this we can infer that X is a(n)

• A) normal good.
• B) inferior good.
• C) Giffen good.
• D) None of the above is correct.

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Definitions:

Natural Capital

The world's stocks of natural assets including geology, soil, air, water and all living organisms.

Pollution Cleanup Costs

The expenses associated with removing pollutants from the environment and restoring natural conditions.

Social Costs

The total cost to society due to an activity or industry, including both direct costs and indirect effects on the environment and human health.

Optimal Level

The most favorable or efficient point or degree of a particular process or condition.