A Decrease in Consumer Incomes Will

question 116

Multiple Choice

A decrease in consumer incomes will:

• A)decrease the demand for an inferior good.
• B)decrease the supply of an inferior good.
• C)increase the demand for a normal good.
• D)increase the supply of a normal good.
• E)do none of the above.

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Definitions:

Point Elasticity

A measure of how responsive the quantity demanded or supplied of a good is to a change in its price, calculated at a particular point on the demand or supply curve.

Producer Surplus

The profit producers make over and above the minimum amount they would be willing to accept for selling their goods or services.

Equilibrium Quantity

The quantity of goods or services supplied is exactly equal to the quantity demanded at the market price.

Equilibrium Price

The cost where the supply of goods meets the demand for those goods.