Income effect results in _____
a. a change in the elasticity of demand of a consumer
b. a change in the buying power of consumers
c. a change in the opportunity cost
d. a change in the permanent income of a consumer
b
You might also like to view...
The consumer equilibrium condition for two goods is achieved by equating the:
a. marginal utility of one to the price of the other for the last dollar spent on each good. b. prices of both goods for the last dollar spent on each good. c. marginal utilities of both goods for the last dollar spent on each good. d. ratios of marginal utility to the price of both goods for the last dollar spent on each good.
In the short run, if the marginal cost exceeds the marginal revenue, a perfectly competitive firm should:
a. raise the level of output to maximize profit. b. keep the level of output constant. c. raise the level of output to minimize loss. d. reduce the level of output to minimize loss. e. shut down.
In a monopolistically competitive industry, the competitive element results from ____ and the monopoly element results from ____. a. product differentiation; substantial barriers to entry
b. a large number of firms and free entry; product differentiation. c. advertising; product differentiation. d. product differentiation; the small number of large producers.
In deciding how much money to hold, individuals
A) must understand the velocity of the money and its role in the economy. B) compare the inflation rate with the market interest rate. C) base their decisions on what others are doing. D) evaluate the relative costs and benefits of holding money versus other assets.