If a Producer Knew His Product to Be an Inferior

question 136

Multiple Choice

If a producer knew his product to be an inferior good and he also knew average household income was falling,he might

• A)decrease output because the demand for his product would rise.
• B)increase output because the demand for his product would rise.
• C)keep his output the same.
• D)cut output immediately because the demand for his product would surely fall.
• E)close down,because inferior goods are the first to be eliminated from household budgets when income falls.

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Definitions:

Foreign Employees

Workers who are employed in a country where they are not citizens.

NGOs

Non-Governmental Organizations, which are nonprofit entities operating independently of any government, typically focused on addressing social, environmental, or political issues.

Business Conduct

The standard of behavior and ethical principles guiding the operations and individuals within a business organization.

Official Authority

The legal and formal right granted to a person or entity to make decisions and enforce those decisions within an organization or community.