If the economy goes into a recession and incomes fall, what happens in markets?Prices of inferior goods go up because the demand for them increasesPrices of normal goods go up because the demand for them increasesPrices of all goods go downNone of the other answers is correctSuppose the demand curve is given by P=10-Q and the supply curve by Q=PIf the price in the market is given by $7, thenThe market is in equilibriumThere is a a surplus in the marketThere is a shortage in the marketIncreasing the price will result in an increase in the quantity demanded

If the economy goes into a recession and incomes fall, what happens in markets? Prices of inferior goods go up because the demand for them increases Prices of normal goods go up because the demand for them increases Prices of all goods go down None of the other answers is correct

If the economy goes into a recession and incomes fall, what happens in markets? Prices of inferior goods go up because the demand for them increases Prices of normal goods go up because the demand for them increases Prices of all goods go down None of the other answers is correct

Microeconomics: Principles & Policy

14th Edition

ISBN:9781337794992

Author:William J. Baumol, Alan S. Blinder, John L. Solow

Publisher:William J. Baumol, Alan S. Blinder, John L. Solow

Chapter4: Supply And Demand: An Initial Look

Section: Chapter Questions

Problem 7DQ

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Question

If the economy goes into a recession and incomes fall, what happens in markets?
Prices of inferior goods go up because the demand for them increases
Prices of normal goods go up because the demand for them increases
Prices of all goods go down
None of the other answers is correct
Suppose the demand curve is given by P=10-Q and the supply curve by Q=P
If the price in the market is given by $7, then
The market is in equilibrium
There is a a surplus in the market
There is a shortage in the market
Increasing the price will result in an increase in the quantity demanded

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