According to the income effect, when the price of automobiles rises, people buy fewer automobiles because
a. they substitute other forms of transportation for driving.
b. the nominal amount of their paychecks is smaller.
c. the purchasing power of their income is reduced.
d. their demand for automobiles is very elastic.
C
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Payments by a corporation to its shareholders are known as
A) dividends. B) coupons. C) stocks. D) bonds.
Suppose that consumption spending is $4,200 billion, spending on durable goods is $1,200 billion, and spending on services is $2,000 billion. What does spending on nondurable goods equal?
A) $7,200 billion B) $1,000 billion C) $2,200 billion D) $3,200 billion E) There is not enough information to answer this question.
Which of the following statements is true?
A. Economic profit is always positive. B. Economic profit is greater than or equal to accounting profit. C. Accounting profit is greater than or equal to economic profit. D. Accounting profit is always positive.
Profits in the short run attract resources to industries in the long run, allowing them to expand.
Answer the following statement true (T) or false (F)