The Income of Consumers Increases

question 207

Multiple Choice

The income of consumers increases. and the wage rate in the seafood industry increases. As a result

• A) the price of seafood stays the same and the quantity sold can either increase or decrease, depending on whether the change in demand is greater than the change in supply.
• B) the price of seafood increases and the quantity sold can either increase, decrease or stay the same depending on whether the change in demand was greater than the change in supply.
• C) the equilibrium quantity sold increases and price can either increase or decrease, depending on whether the change in demand is greater than the change in supply.
• D) the equilibrium quantity sold can either increase or decrease and the price can either increase or decrease, depending on whether the change in demand was greater than the change in supply.

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Definitions:

Two-Asset Portfolio

A financial portfolio consisting of two different assets, aiming to diversify investment risks and returns.

Standard Deviation

A measure of the dispersion or spread of a set of numbers, indicating how much variation exists from the average.

Risky Asset

An investment that holds a degree of uncertainty regarding its returns or principal amount.

Non-Risky Asset

A financial asset with a guaranteed or highly predictable return rate, such as government bonds.