Suppose That Consumer Income Decreases and That Hamburger Is an Inferior

question 268

Multiple Choice

Suppose that consumer income decreases and that hamburger is an inferior good. Which of the following will occur in the market for hamburger?

• A)Market clearing price will rise, and equilibrium quantity will rise.
• B)Market clearing price will fall, and equilibrium quantity will fall.
• C)Market clearing price will rise, and equilibrium quantity will fall.
• D)Market clearing price will fall, and equilibrium quantity will rise.

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Definitions:

Compounded Annually

Interest calculation method where the interest is added to the principal sum once a year, so each year’s interest earnings are based on the principal plus the accumulated interest.

RRSP Contributions

Money placed into a Registered Retirement Savings Plan, intended to serve as retirement savings and provide tax benefits in Canada.

First Contribution

The initial investment or deposit made into a financial instrument or savings account.

Compounded Monthly

The process of calculating interest on an investment monthly and adding it to the principal, resulting in interest earned on the previous interest.