Which of the following does NOT occur when the price of a good increases?
A. The good becomes more expensive relative to all other goods.
C. Consumers shift their purchases away from the more expensive good.
D. The consumer is effectively poorer than before the increase in price.
B. The consumer's purchasing power increases.
You might also like to view...
An increase in the price of cameras results in a decrease in the demand for film. The two products are
a. complements. b. unrelated. c. demand elastic d. substitutes
Which of the following represents key strengths of the market economy as a system of allocation? a. Goods and services are allocated based on willingness and ability to pay,rather than based on need
b. Producers have strong incentives to innovate because successful innovatorsare rewarded with higher profit. c. Since price is freely set based on supply and demand, shortages and surplusesare minimized. d. All of the answers above are correct.