If Price Declines

question 30

Multiple Choice

If price declines,

• A)there may have been an increase in supply.
• B)there may have been a decrease in demand.
• C)there may have been a decrease in supply.
• D)there may have been an increase in supply AND a decrease in demand.
• E)there may have been a decrease in demand AND a decrease in supply.

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Definitions:

Common Resource

A resource like air or water that is non-excludable and rivalrous, meaning it's impossible to prevent anyone from using it, but one person's use diminishes another person's ability to use it.

Nonexcludable

A nonexcludable good is one where it is not possible to prevent people who have not paid for it from having access to it, typical in public goods.

Marginal Social Benefit

The additional benefit received by society as a whole from consuming one more unit of a good or service.

Public Good

A good or service offered to every member of a community free of charge, supplied either by the government or a non-profit private entity.