Increase in Price of a Good Will Increase Consumers' Demand

question 8

Multiple Choice

Increase in price of a good will increase consumers' demand.This is a(n)

• A)positive statement.
• B)true statement.
• C)inverse statement.
• D)normative statement.

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Definitions:

Pareto Optimal

A state of allocation of resources in which it is impossible to make any individual better off without making at least one individual worse off.

Reallocation

The process of distributing or reallocating resources, tasks, or investments in a different manner with the aim to improve efficiency, returns, or outcomes.

Utility Increase

A rise in the level of satisfaction or benefit that a consumer derives from the consumption of goods or services.

Contract Curve

In economics, it represents the set of optimal distributions of goods or resources between parties that maximizes their utility in an exchange.