When the price of a good falls, consumers buy more of the good because it is cheaper relative to competing goods. This statement describes the:
a. consumer equilibrium effect.
b. price effect.
c. income effect.
d. substitution effect.
d
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Tommy's Teddy Bears incurs $300,000 per year in explicit costs and $50,000 in implicit costs. The shop earns $600,000 in revenues and has $1.1 million in net worth. Based on this information, what is accounting profit for Tommy's Teddy Bears?
A) $250,000 B) $300,000 C) $500,000 D) $1.35 million
________ in the foreign interest rate causes the demand for domestic assets to ________ and the domestic currency to appreciate, everything else held constant
A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease
Total product is maximized where
A) average product is maximized. B) marginal product is maximized. C) average product is equal to 0. D) marginal product is equal to 0.
In a market economy, prices help determine the distribution of goods and services but not the allocation of resources
a. True b. False Indicate whether the statement is true or false