Exhibit 4-1

-If the price of the good described in Exhibit 4-1 is $1.60, then an economist would expect the

Question

Exhibit 4-1
  
-If the price of the good described in Exhibit 4-1 is $1.60, then an economist would expect the

Quizplus · Accepted Answer

The economist would use the law of demand which states that as the price of a good decreases, the quantity demanded of that good will increase, ceteris paribus. Therefore, if the price of the good described in Exhibit 4-1 is currently at $1.60, an economist would expect the price to decrease and for the quantity demanded to increase. However, the exact quantity demanded cannot be determined from this information alone. Option A can be eliminated because it presents a specific price decrease rather than an expected change based on economic theory. Option C and E cannot be determined from this information alone. Option D is incorrect as the quantity demanded would not increase to 80 units if the price decreased to $1.60.

Exhibit 4-1 -If the Price of the Good Described in Exhibit 4-1