Asked by Denver Osborn on May 07, 2024
Verified
If the economy booms and peoples' incomes rise,then the demand curve for a normal good like new houses will _____ and the equilibrium quantity of new houses produced will _____.
A) shift to the right;increase
B) not shift;not change
C) not shift;increase
D) shift to the left;decrease
Demand Curve
A depiction in graphic form that illustrates the link between the cost of a merchandise and the volume of demand from buyers.
Equilibrium Quantity
The quantity of goods or services at which supply equals demand, and there is no tendency for change in the price or quantity.
Normal Good
A type of good for which demand increases as consumer income rises, reflecting goods that are more desirable as financial conditions improve.
- Conceive the linkage between dynamics in supply and demand curves and their impact on the equilibrated price and quantity levels.
- Identify the effects of economic conditions (e.g., income changes, production cost changes) on market equilibrium.
Verified Answer
YM
Yesenia MendezMay 09, 2024
Final Answer :
A
Explanation :
When the economy booms and people's incomes rise, the demand for normal goods like new houses increases. This results in a shift of the demand curve to the right. As a result, the equilibrium quantity of new houses produced will also increase, as the market adjusts to meet the higher level of demand.
Learning Objectives
- Conceive the linkage between dynamics in supply and demand curves and their impact on the equilibrated price and quantity levels.
- Identify the effects of economic conditions (e.g., income changes, production cost changes) on market equilibrium.