What happens to the equilibrium price and quantity in the market for science fiction novels, a normal good, when income increases and a new technology is invented, making it easier to publish books.
a. Quantity and price both increase.
b. Quantity and price both decrease.
c. Quantity will increase and the price change is ambiguous.
d. Price will decrease but the quantity change is ambiguous.
c. Quantity will increase and the price change is ambiguous.
You might also like to view...
Which of the following events is least likely to take place under a fixed exchange rate system?
A) an increased volume of trade because of a decline in exchange rate volatility B) increased cross-border capital flows C) increase in cost of trade because of higher transaction costs D) increased cross-border labor flows in integrated economies
Which of the following is an exogenous variable in our model of the goods market in Chapter 3?
A) consumption (C) B) saving (S) C) disposable income (YD) D) government spending (G) E) none of the above