The average price of a share of stock on the New York Stock Exchange falls by 30 percent. Other things being equal, we would expect
A) a shift up of the consumption function.
B) an increase in the marginal propensity to consume.
C) a decrease in the marginal propensity to consume.
D) a shift down of the consumption function.
D
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At a given point in time, the Rawlsian welfare function gives equal weight to each individual's utility
Indicate whether the statement is true or false
The income effect describes the:
A. increase in the quantity of labor supplied in response to a higher wage. B. decrease in the quantity of labor supplied due to the greater demand for leisure caused by a higher income. C. decrease in the quantity of labor supplied in response to a lower wage. D. increase in the quantity of labor supplied due to the greater demand for leisure caused by a higher income.
Big Ol’ Robots is a family company that has been in business for more than 15 years. The company has decided to incorporate. What will this mean for the ownership of the firm?
a. The corporation will be owned by its shareholders. b. The company’s owners will reinvest profits to obtain more capital. c. Venture capitalists will own a significant stake in the company. d. The original owners will step down and no longer be part of the company.
Profits or losses must be temporary for perfectly competitive firms. Why?