The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a substitute product
Indicate whether the statement is true or false
FALSE
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As the demand for a product falls, it is not uncommon for the industry to become a monopoly. This is most likely due to
a. an increase in the number of barriers. b. legal restrictions being imposed. c. the surviving firm operating on the declining part of its average cost curve. d. patent protection causing high prices.
Wages in the United States are higher than wages in China primarily because
a. worker productivity is higher in the United States. b. the United States has more people and, therefore, a larger number of skilled workers. c. in the United States, less capital is required per employee. d. China has more natural resources that employees can work with.
A firm will use more and more land until the marginal revenue product of land
A. rises to the level of the rent. B. falls to the level of the rent. C. rises above the level of the rent. D. falls below the level of the rent.
Deciding to go to a ballgame rather than do your homework is an example of a(n)
a. production possibility b. a bad idea c. trade-off d. person about to lose their college scholarship