What term is defined as the change in the amount consumers will buy because the purchasing power of their money changes?
a. consumer taste
b. consumer expectation
c. income effect
d. substitution effect
Answer: c. income effect
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According to historian Charles Beard's analysis and interpretation, the Constitution was
(a) divinely inspired. (b) strongly favored by the vast majority of the colonists. (c) influenced by the economic self-interest of the delegates to the Constitutional Convention. (d) of little importance to future economic growth.
Net wealth is calculated by subtracting what from assets?
a. Capital b. Liabilities c. Interest d. Depreciation
According to the law of demand
A) people buy more of a good when the price rises. B) people buy more of a good when their income rises. C) people buy more of a good when the relative price rises. D) people buy more of a good when the price falls.
Assume that the price of silk ties in a perfectly competitive market is $21 and that the typical firm confronts the following costs:
a. What is the profit-maximizing rate of output for the firm? (Use the profit-maximizing rule.) b.. How much profit does the firm earn at that rate of output? c. If the price of ties falls to $7, how many ties should the firm produce? d. At what price should the firm shut down?