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

ENGR.ECONOMIC ANALYSIS
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Chapter1: Making Economics Decisions
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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
Transcribed Image Text: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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