In general, the income effect of an increase in the price of a normal good:
A. will cause the individual to buy more of that good because they have relatively more income.
B. will cause the individual to buy less of that good because they have relatively less income.
C. will cause the individual to buy more of that good because they have relatively less income.
D. will cause the individual to buy less of that good because they have relatively more income.
B. will cause the individual to buy less of that good because they have relatively less income.
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The figure above provides information about Light-U-Up Utilities, which is a natural monopoly that provides electricity. What is the area of deadweight loss when Light-U-Up is regulated and follows an average cost pricing rule?
A) acg B) degf C) deg D) There is no deadweight loss.
The overriding objective of a cartel is to maximize the amount of profit each of its members can earn through cooperation with the other members
Indicate whether the statement is true or false
Elastic supply
What will be an ideal response?
Suppose there are three nations (North, South, and East) and three goods (A, B, and C). Given resources and technology, North can produce 5 units of A, or 2 units of B, or 10 units of C, or any linear combination thereof. South can produce 5 units of A, or 2 units of B, or 5 units of C, or any linear combination thereof. East can produce either 1 unit of A, or 5 units of B, or 10 units of C, or any linear combination thereof. The most efficient pattern of specialization is to have
a) North produce A, South produce B, and East produce C b) North produce A, South produce C, and East produce B c) South produce A, North produce B, and East produce C d) South produce A, North produce C, and East produce B e) East produce A, South produce B, and North produce C