Given a Downward-Sloping Demand Curve and an Upward-Sloping Supply Curve

question 4

Multiple Choice

Given a downward-sloping demand curve and an upward-sloping supply curve for a product,an increase in consumer incomes will:

• A)increase equilibrium price and quantity if the product is a normal product
• B)decrease equilibrium price and quantity if the product is a normal product
• C)have no effect on equilibrium price and quantity
• D)reduce the quantity demanded, but not shift the demand curve
• E)increase equilibrium price and decrease equilibrium quantity if the product is an inferior product

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Definitions:

Net Increase

The amount by which a company's or individual's assets exceed their losses or liabilities over a given period.