Marginal utility theory predicts that if a consumer's income decreases, the consumer
A) buys fewer normal goods.
B) buys fewer inferior goods.
C) buys more of all goods.
D) might either increase or decrease purchases of normal goods.
A
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The aggregate demand curve shows that, if other factors are held constant
A) higher price levels will result in higher total planned spending. B) higher price levels will result in lower total planned spending. C) lower price levels will result in inflationary conditions. D) higher price levels will result in lower interest rates.
Sometimes one observes that the price of a company's stock falls after the announcement of favorable earnings. This phenomenon is
A) clearly inconsistent with the efficient markets hypothesis. B) consistent with the efficient markets hypothesis if the earnings were not as high as anticipated. C) consistent with the efficient markets hypothesis if the earnings were not as low as anticipated. D) consistent with the efficient markets hypothesis if the favorable earnings were expected.