Ceteris Paribus, a Decrease in the Price of a Good

question 4

Multiple Choice

Ceteris paribus, a decrease in the price of a good will cause the:

• A)​quantity demanded of the good to decrease.
• B)​quantity supplied of the good to increase.
• C)​consumer surplus derived from the good to increase.
• D)​supply of the good to decrease.

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Definitions:

MPC

Marginal Propensity to Consume, a metric that represents the proportion of an additional unit of income that is spent on consumption.

Stock Market

A collection of markets and exchanges where the buying, selling, and issuance of shares of publicly held companies take place.

Initial Public Offerings

The process where a private company offers shares of stock to the public for the first time.

Investment

The allocation of resources, usually financial, in expectation of future returns.