DQuestion 26 1.32 pts Assuming powdered milk to be an inferior good, an increase

Question

DQuestion 26 1.32 pts Assuming powdered milk to be an inferior good, an increase in consumer income, other things being equal, would tend to: O shift the demand curve for powdered milk to the right shift the powdered milk demand curve to the left cause a movement up along the demand curve for powdered milk cause a movement down along the powdered milk demand curve DI Question 27 1.32 pts The principle of comparative advantage states that a person should produce a good if that person has an absolute advantage in a related activity C has a comparative advantage in a related activity. O has the lowest opportunity cost of production of that good. is equally good at producing this good as someone else. has an absolute advantage in producing the D | Question 28 1.32 pts The term "utility" in economics refers to O consumer satisfaction government surplus a product's usefulness in the market producer costs

Explanation / Answer

26. Option 2

Explanation: The demand for inferior goods reduces with an increase in income and increases with a fall in income. Therefore, when income rises, a person demands less quantity of an inferior good at all price levels. So, there will be a leftward shift in the demand curve of the good.

27. Option 3

Explanation: A country has a comparative advantage in the production of a good when it can produce the good at the lowest opportunity cost.

28. Option 1

Explanation: Utility is a subjective concept. By definition, utility refers to the satisfaction derived by a consumer by consuming different units of a good.

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