Related to the Economics in Practice on p. 129: Suppose Store ABC runs an ad claiming to have "low prices everyday." They even demonstrate that the total expenditure for a basket of groceries is less at their store than at any of their competitors. Which of the following statements is not true?

A. You would clearly be better off shopping at Store ABC.
B. Even if your preferences are generally consistent with the basket used by Store ABC, it may still be possible for you to substitute other similar goods for those in the basket used by Store ABC (in their example) and thus spend less at another store.
C. Your preferences may not be consistent with the basket used by Store ABC (in their example), thus it is not clear whether or not you would be better off shopping at Store ABC or not.
D. All of the above statements are true.


Answer: A

Economics

You might also like to view...

List the four ground rules for a well-functioning market

What will be an ideal response?

Economics

The marginal product of labor is defined as

A) the change in output that a firm produces as a result of hiring one more worker. B) the additional labor cost of producing one more unit of output. C) the change in total revenue that results when an additional unit of a labor is hired. D) the additional labor required to produce one more unit of output.

Economics

If one firm in a perfectly competitive industry is somehow able to produce at a lower cost than competing firms in the short run,

a. the competing firms will adopt similar production techniques in the long run. b. the more efficient firm will earn higher profits than the competing firms in the long run. c. the competing firms will earn higher profits than the more efficient firm in the short run. d. the competing firms will go out of business in the long run.

Economics

An decrease in the price level in the United States will shift the aggregate expenditure line downward

Indicate whether the statement is true or false

Economics