The real-income effect refers to
A. the law of diminishing marginal utility.
B. substitution of less expensive commodities for more expensive commodities.
C. the change in purchasing power when the price of a good changes.
D. the want-satisfying power of a good or service.
Answer: C
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This graph depicts the demand for a normal good.
A shift from A to B in the graph shown for a normal good might be caused by:
A. an increase in price.
B. a decrease in price.
C. an increase in income.
D. a decrease in income.
The AFC curve is
A. J.
B. K.
C. L.
D. M.
Which of the following firms best fits the definition of a monopoly?
A. General Motors B. Exxon Mobil C. Local electric utility D. AT&T
$500 invested at an annual interest rate of 8 percent will be worth how much at the end of one year?
A. $504. B. $508. C. $540. D. $580.