All of the following will shift the consumption function EXCEPT
A) a change in income.
B) a change in wealth.
C) a change in the rate of interest.
D) a change in expectations concerning economic conditions.
A
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Assume a perfectly competitive firm is producing 500 units of output, P = $7, ATC of the 500th unit is $6, marginal cost of the 500th unit = $7, and AVC of the 500th unit = $5. Based on this information, the firm is:
A) earning an economic profit of $500. B) earning an economic profit of $1,000. C) incurring a loss of $500. D) incurring a loss of $1,000.
Refer to the above figure. An unregulated natural monopolist's profits will be
A) profits equal to Q1 times distance a-c. B) losses equal to Q4 times distance f-g. C) losses equal to Q3 times distance d-e. D) profits equal to Q1 times distance a-b.
In a collusive oligopoly, joint profits are maximized when a price leader establishes price based on: a. its own demand and cost schedules
b. the market demand for the product and the marginal costs of the various firms. c. the market demand for the product and its own marginal cost schedule. d. the demand curve faced by a typical competitor and its own marginal cost curve.
Suppose the price of a gallon of ice cream rises from $4 to $5 and the price of a can of coffee rises from $2 to $2.50 . If the CPI rises from 150 to 177, then people likely will buy
a. more ice cream and more coffee. b. more ice cream and less coffee. c. less ice cream and more coffee. d. less ice cream and less coffee.