-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

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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

Moving from point A to point C in a supply and demand context typically indicates an increase in both the quantity demanded and supplied. This could be due to an increase in income (making it a normal good more in demand) and an advancement in production technology (making it cheaper to produce more).

​ ​-Refer to Exhibit 3-2.Suppose Equilibrium Is at Point A.Something Then

-Refer to Exhibit 3-2.Suppose Equilibrium Is at Point A.Something Then