Asked by Angela Pantoja on Apr 25, 2024
Verified
Peanut butter is an inferior good.If there is an increase in income,total surplus in the peanut butter market:
A) will increase.
B) will decrease.
C) will not change.
D) may change,but we cannot determine the change without more information.
Total Surplus
The sum of consumer surplus and producer surplus, representing the total benefit to society from the production and consumption of goods or services.
Inferior Good
A type of good for which demand decreases as the income of the consumer increases, opposite to a normal good.
- Recognize the impact of external changes (such as technology and income changes) on market equilibrium.
- Evaluate the repercussions of shifts in supply and demand on the comprehensive surplus.
Verified Answer
YL
Yolanda Liberty6 days ago
Final Answer :
B
Explanation :
Peanut butter is an inferior good, which means that as income increases, the demand for peanut butter decreases. Therefore, if there is an increase in income, the total surplus in the peanut butter market will decrease as well because consumers will be buying less peanut butter.
Learning Objectives
- Recognize the impact of external changes (such as technology and income changes) on market equilibrium.
- Evaluate the repercussions of shifts in supply and demand on the comprehensive surplus.
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