Glossary
Knowledge Check - Scenario 4
For the following milk market scenario, identify the type and cause of change.
Scenario 4: The economy sinks into a recession, causing incomes of many Americans to decrease (assume milk is a normal good).
1. Based on Scenario 4, the demand curve for milk
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shifts to the right. |
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shifts to the left. |
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does not shift. |
That's incorrect. A decrease in incomes would cause the demand for milk to
decrease, shifting the demand curve to the left.
That's correct. A decrease in incomes would cause the demand for milk to
decrease, shifting the demand curve to the left.
Scenario 4: The economy sinks into a recession, causing incomes of many Americans
to decrease (assume milk is a normal good).
2. Based on Scenario 4, which factor caused the change in demand for milk?
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A change in consumer expectations |
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A change in consumer tastes or preferences |
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A change in the number of consumers in the market |
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A change in consumer income |
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A change in the price of a substitute good |
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A change in the price of a complementary good |
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A change in the price of milk |
That's incorrect. A decrease in incomes would cause the demand for milk to
decrease.
That's correct. A decrease in incomes would cause the demand for milk to
decrease.