In the life-cycle hypothesis of consumption, two individuals with the same age, tastes, family composition, and income will
A) consume the same amount.
B) each consume less the greater is their accumulated wealth.
C) each have positive saving ratios.
D) consume differing amounts if their wealth differs.
D
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If a 3 percent increase in the price of tennis shoes leads to a 7 percent increase in the number of tennis shoes supplied
A) the elasticity of supply equals 0.43. B) the elasticity of supply equals 2.33. C) income elasticity equals 2.33. D) supply is inelastic.
Comment on the following statement: "I decided to buy a car from a dealer in a town 100 miles away because he was offering a price that was $100 lower than the dealer in my hometown. Therefore, I saved $100."
What will be an ideal response?
According to Alfred Chandler (1977), big business could be justified, at least in part, by the ability of large scale enterprises to take advantage of scale economies
Indicate whether the statement is true or false
A constant-cost industry is one in which
A) output increases lead to productivity gains. B) the marginal product of labor is constant. C) there is no change in long-run per-unit costs, even as output varies. D) each firm has a horizontal long-run average cost curve.