MULTIPLE CHOICE
(2 points each)
1. ______ Suppose that spaghetti is an inferior good. Now suppose that the United States goes into another recession and incomes decline. Assuming markets are competitive, what will happen to the equilibrium price and quantity sold of spaghetti as a result?
a. Quantity increases, price increases.
b. Quantity increases, price decreases.
c. Quantity decreases, price increases.
d. Quantity decreases, price decreases.