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.

Distinguish between the substitution effect and the income effect on consumer choice.

Identify conditions under which goods are substitutes or complements based on consumer preferences.

Understand the theoretical underpinnings of consumer choice theory in the context of demanding firm products.

Evaluate and critique economic statements related to consumer choices and constraints.

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Definitions:

External Locus

A psychological concept referring to individuals who believe that external forces or events primarily control their life outcomes.

Depression

A state of mental distress denoted by a lasting sense of gloom or lack of involvement in routine interests, significantly eroding the ability to manage daily life.

Subjective Well-Being

An individual's personal assessment of their happiness and life satisfaction.

Captive Animals

Animals that are kept in a controlled environment, such as zoos or research facilities, and not living in the wild.