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. 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.
B. You would clearly be better off shopping at Store ABC.
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: B
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A) budget surplus B) trade deficit C) trade surplus D) fiscal deficit
An efficient price is a price set at:
A) marginal cost. B) opportunity cost. C) average fixed cost. D) average variable cost.
Firms deducting the asset's full cost at the time of acquisition from taxable income is called investment tax credit.
A. True B. False C. Uncertain
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A) is not subject to increasing opportunity costs. B) fails to reflect tradeoffs. C) fails to benefit trading nations. D) refutes the principles of comparative advantage. E) All of the above.