Suppose the cost of milk rose 100 percent from 1990 to 2010, and average prices for the economy rose 133 percent. Relative to others, people who purchased milk experienced a:
A. Lower real income as a result of the price effect.
B. Higher real income as a result of the price effect.
C. Lower real income as a result of the wealth effect.
D. Higher real income as a result of the income effect.
B. Higher real income as a result of the price effect.
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According to the principle of diminishing returns to labor, if the amount of capital and other inputs are held constant, employing additional workers:
A. increases output at an increasing rate. B. increases output at a decreasing rate. C. increases output at a constant rate. D. decreases output at an increasing rate
The Constitution of the United States expressly forbids
A) import tariffs. B) export tariffs. C) import quotas. D) export quotas.
The slope of the budget line in the graph shown:
A. represents the opportunity cost of the two goods relative to each other.
B. represents the relative marginal utilities from consuming the two goods.
C. measures the total utility the consumer gets from consuming the two goods.
D. is the consumer’s income level.
Winona's Fudge Shoppe is maximizing profits by producing 1,000 pounds of fudge per day. If Winona's fixed costs unexpectedly increase and the market price remains constant, then the short run profit-maximizing level of output
a. is less than 1,000 pounds. b. is still 1,000 pounds. c. is more than 1,000 pounds. d. becomes zero.