Exhibit 3-2

Good X

Refer to Exhibit 3-2. Suppose equilibrium is at point A. Something then changes and equilibrium becomes point C. Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?
A)There was an increase in income and production technology advanced.
B)There was a decrease in income and production technology advanced.
C)There was an increase in preferences for good X and an increase in wage rates (a relevant resource price.)
D)There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.)

Question

Exhibit 3-2

Good X
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Refer to Exhibit 3-2. Suppose equilibrium is at point A. Something then changes and equilibrium becomes point C. Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?
A)There was an increase in income and production technology advanced. 
B)There was a decrease in income and production technology advanced. 
C)There was an increase in preferences for good X and an increase in wage rates (a relevant resource price.) 
D)There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.)

Quizplus · Accepted Answer

The Answer of Exhibit 3-2

Good X
​
​
Refer to Exhibit 3-2. Suppose equilibrium is at point A. Something then changes and equilibrium becomes point C. Which of the following is consistent with the change in equilibrium from point A to C (assuming that good X is a normal good)?
A)There was an increase in income and production technology advanced. 
B)There was a decrease in income and production technology advanced. 
C)There was an increase in preferences for good X and an increase in wage rates (a relevant resource price.) 
D)There was an improvement in technology in the production of good X and an increase in wage rates (a relevant resource price.)