Questions and Answers
Which of the following factors can lead to a simultaneous shift in supply and demand?
A recession affecting both buyers and sellers.
What happens when supply and demand both increase or decrease?
Price and quantity traded both increase.
Which type of goods see a decrease in demand as income rises?
Inferior goods.
What is the outcome when supply increases but demand decreases?
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What is one of the determinants of price elasticity of demand mentioned in the text?
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How does the budget share affect the incentive to look for substitutes when the price of an item rises?
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Which concept represents the percentage change in quantity demanded in response to a 1 percent change in income?
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