A Case Where a Consumer Buys Less of a Good

question 20

Multiple Choice

A case where a consumer buys less of a good when its price falls:

• A)cannot occur if the indifference curves are convex to the origin.
• B)is an example of a Giffen good and will produce an upward-sloping market demand curve.
• C)gives rise to a positively sloped price-consumption curve.
• D)refers to an inferior good with a substitution effect that dominates the income effect.

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Definitions:

Equilibrium Quantity

The amount of products or services available that matches the amount desired at the market's equilibrium price.

Equilibrium Price

The price at which the quantity of a good or service supplied equals the quantity demanded in a market.

Chocolate-Covered Peanuts

A snack or confectionery consisting of peanuts that are coated in a layer of chocolate.

Surplus

A scenario where the supply of goods surpasses what is being demanded at the present price level.