As a person's income rises, eventually the ________ effect outweighs the ______ effect.
Fill in the blank(s) with the appropriate word(s).
income; substitution
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A consumer maximizes her total utility from a bundle of goods when her marginal utility from each good is equal
Indicate whether the statement is true or false
Which of the following actions has the best potential for experiencing economies of scope?
A) producing a product that has appeal to a wider segment of the market B) producing computers and software C) producing spaghetti and soft drinks D) producing cars and trucks
A decrease in the interest rate reduces the opportunity cost of holding money
a. True b. False
"When economies experience high levels of inflation, the ability of money to act as a unit of account diminishes, and it becomes harder to make decisions." Which of the following costs of inflation does this statement describe?
a. Menu costs b. Shoe-leather costs c. Unit-of-account costs d. Time costs