If an Economist Says "The Higher the Price of Oranges,the

question 149

Multiple Choice

If an economist says "the higher the price of oranges,the fewer oranges individuals will buy,ceteris paribus," this means that

• A) individuals don't like high-priced oranges.
• B) as the price of oranges rises,individuals' preferences change and they no longer like oranges as much as they once did.
• C) as the price of oranges rises,individuals' preferences do not change,nor does anything else,but individuals buy fewer oranges in response to the higher price of oranges.
• D) the higher the price of oranges,the fewer oranges individuals will buy,assuming that people have economic motives.

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Definitions:

Floating Exchange Rate

A currency system where the value of a currency is allowed to fluctuate according to the foreign exchange market.

Fixed Exchange Rate

A currency system in which the value of a country's currency is tied to the value of another single currency, a basket of other currencies, or another measure of value, such as gold.

Trade Barriers

Trade Barriers are government-imposed restrictions on the free exchange of goods and services between countries, including tariffs, quotas, and subsidies.

Free Trade

An economic policy of not discriminating against imports from and exports to foreign jurisdictions, allowing goods to move freely across borders.