The Setrite Corporation produce chairs. An economist working for the firm predicts that if people's incomes rise next year, then the demand for our chairs will for our chairs will increase ceteris paribus The accuracy of the economist's prediction depends on whether the chairs Setrite Produce ?
Correct answer: B. are normal goods
- A. have few substitutes.
- B. are normal goods
- C. have few complementary goods.
- D. have many complementary goods.
Explanation
The prediction that demand will rise with consumers' incomes is accurate if chairs are normal goods. Demand for an inferior good would fall as income increases.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
The quantity demanded of Pepsi has decreased. The best explanation for this is that ?
When the decrease in the price of one good causes the demand for another good to decrease, the goods are_________?
If the demand for coffee decreases as income decreases, coffee is ?
If both marginal cost and marginal revenue increase, a firm ?
A firm that breaks even after all economic costs are paid is earning ?
If a firm wage costs increase this will cause __________ and __________?