An Increase in the Demand for Lobster Due to Changes

question 150

Multiple Choice

An increase in the demand for lobster due to changes in consumer tastes, accompanied by a decrease in the supply of lobster as a result bad weather reducing the number of fishermen trapping lobster, will result in

• A)a decrease in the equilibrium quantity of lobster and no change in the equilibrium price.
• B)an increase in the equilibrium price of lobster and no change in the equilibrium quantity.
• C)an increase in the equilibrium price of lobster; the equilibrium quantity may increase or decrease.
• D)a decrease in the equilibrium quantity of lobster; the equilibrium price may increase or decrease.

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Definitions:

Distributing Income

The process by which income is allocated among various economic agents, such as individuals, businesses, and government sectors.

Utility

In the field of economics, utility is defined as the comprehensive satisfaction gained from the consumption of a product or service.

Income

The monetary gain received from work (wages or salary), capital, or other sources during a specific period of time.

Quintile Distribution

Quintile distribution is a method of dividing a population into five equal groups or quintiles, based on variables such as income or wealth, to analyze economic inequality.