Explain how a consumer's income and the prices of goods limit consumption possibilities
What will be an ideal response?
A consumer's consumption possibilities are limited by the consumer's income and the prices of the goods. The consumer is unable to consume limitless quantities of goods and services because the consumer must pay a price for each good or service consumed and the consumer's income is limited. If the consumer's income increases and/or the prices of the goods and services fall, the quantity of goods and services the consumer can afford increases, thereby increasing the consumer's consumption possibilities.
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Which of the following best describes the substitution effect caused by a price increase?
a. A change in consumption due to the fact that you will not buy goods whose marginal value is below the new price. b. A change in consumption due to the fact that you cannot afford your original market basket. c. A smaller percentage change in quantity than in price. d. A larger percentage change in quantity than in price.
In the United States in 2014, the percentage of firms that employed between 3 and 199 workers and did not offer health insurance as a fringe benefit to the workers was about
A) 2%. B) 46%. C) 61%. D) 98%.
Graphically, to find the profit-maximizing price for a monopoly, find the output level where MC = MR and draw a line from that output level vertically to the demand curve
Indicate whether the statement is true or false
Who tends to benefit from the sugar price supports?
a. users of sugar in other products b. individual users of sugar c. producers of other agricultural products d. producers of sugar e. All of the above are correct.