During October and November 2008, gasoline prices were falling dramatically, making travel by car less expensive but air travel prices were as high as ever. What is TRUE about consumer preferences, possibilities, or choices?
A) The relative price of air travel in terms of travelling by car decreases.
B) If travelling by car is a normal good, both the substitution and income effects would lead to a decrease in travelling by car.
C) The consumers' budget line would shift outward and its slope would not change.
D) If air travel is a normal good, both the substitution and income effects would lead to an increase in air travel.
A
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The slope of the consumption function is
A) equal to the MPC and is equal to 1. B) not equal to the MPC and is equal to 1. C) equal to the MPC and is less than 1. D) equal to the MPC and is greater than 1. E) not equal to the MPC and is less than 1.
A decrease in the price of one good results in a parallel shift in the budget line.
Answer the following statement true (T) or false (F)
What other business disciplines are related to Managerial Economics?
What will be an ideal response?
If the marginal cost of producing the tenth unit of output is $3, and if the average total cost of producing the tenth unit of output is $2, then at ten units of output, average total cost is rising
a. True b. False Indicate whether the statement is true or false