John likes to buy cola every month. He prefers to spend $0.10 per can, but is willing to spend as much as $0.15 per can. Usually, a can of cola costs $0.12 . However, due to decreased demand, the price has dropped to $0.11 per can, increasing John's purchasing power. This is an example of the _____
a. income effect
b. substitution effect
c. accelerator effect
d. wealth effect
a
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A producer's minimum acceptable price for a particular unit of a good
A. will, for most units produced, equal the maximum that consumers are willing to pay for the good. B. is the same for all units of the good. C. must cover the wages, rent, and interest payments necessary to produce the good but need not include profit. D. equals the marginal cost of producing that particular unit.
Refer to Figure 8.2. If the firm expects $80 to be the long-run price, how many units of output will it plan to produce in the long run?
A) 22 B) 34 C) 38 D) 50 E) 64
A sustained increase in total output is possible only if the aggregate
A. Supply curve shifts to the right. B. Supply curve shifts to the left. C. Demand curve shifts to the left. D. Demand curve shifts to the right.
Public goods are basically
A) rival in consumption. B) nonrival in consumption. C) depletable in consumption. D) nondepletable in consumption.