Which of the following explains why the quantity of a good demanded decreases when its price increases?
a. Consumer preferences change when the price of a good changes
b. The nominal income of consumers falls when the price of a good increases.
c. Substitutes become relatively cheaper when the price of a good increases.
d. Complements become relatively cheaper when the price of a good increases.
c
You might also like to view...
When the firm in the figure above maximizes its profit, it earns an economic profit of
A) $3,125. B) $6,250. C) $9,375. D) $5,625. E) None of the above answers are correct because the firm incurs an economic loss.
Suppose the United States has a Gini coefficient of 0.4 and Sweden has a Gini coefficient of 0.25. Which of the following statements is true?
A) Income distribution is changing faster in the United States. B) The distribution of income is more equal in the United States. C) Without information on population, it is not possible to compare income distribution between countries. D) The distribution of income is more equal in the Sweden.