Given the table above, suppose consumption in period two is $40,000. Then, the interest rate rises to five percent, and period-two consumption does not change. We may infer that ________
A) the income effect is stronger than the substitution effect
B) the substitution effect is stronger than the income effect
C) the substitution and income effects cancel out
D) this consumer has a binding borrowing constraint
D
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A monopolistic competitor produces 1,200 units of a good at an average cost of $120 per unit. If the price charged is $135, calculate his total profit
A) $13,500 B) $1,100 C) $18,000 D) $2,000
In a long-run equilibrium in a perfectly competitive market, the average firm earns positive economic profits.
Answer the following statement true (T) or false (F)
Fogel argued that railroads were more cost effective than canals because railroads were faster and were in service all year and that using rail instead of canals would ____
a. lower freight rates on the railroads b. lower government subsidies for railroads c. lower eastern inventories of grain in the d. reduce the wheat being shipped to Europe
As the U.S. price level increases, expenditures by which of the following will remain unaffected?
A. Consumers B. Businesses C. Government D. The rest of the world