If a good is considered a normal good, the demand curve will shift ________ when income increases because ________
A) right; the income and substitution effects move in the same direction.
B) right; the income and substitution effects move in the opposite direction.
C) left; the income and substitution effects move in the same direction.
D) left; the income and substitution effects move in the opposite direction.
A
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Suppose that, given the same number of workers, the United States can produce five times as many computers or 10 times as many airplanes as Mexico. Which of the following statements is true?
A. The United States has an absolute advantage in the production of computers, and Mexico has an absolute advantage in the production of airplanes. B. The United States has an absolute advantage in the production of airplanes, and Mexico has an absolute advantage in the production of computers. C. The United States has an absolute advantage in the production of both airplanes and computers. D. Mexico has an absolute advantage in the production of both airplanes and computers.
Firms should stop borrowing funds
a. as soon as the bank raises the interest rate. b. when the MRP of borrowed funds is equal to the cost of borrowing. c. whenever the future of the firm looks gloomy. d. if their debts are more than 25 percent of the value of the firm.
The market line must
a. pass through the risk-free asset. b. be linear. c. be tangent to the efficient set. d. all of the above.
________: the change in saving with respect to a change in disposable income
Fill in the blank(s) with correct word