Suppose two goods coffee and creamer provide the consumer with utility but only if they are consumed in fixed proportions. An increase in the price of coffee will yield
a. a substitution effect and an income effect in opposite directions.
b. a substitution effect and an income effect in the same direction.
c. a substitution effect but no income effect.
d. an income effect but no substitution effect.
d
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A perfectly competitive firm is selling 300 units of output at $4 each. At this output level, total fixed cost is $100 and total variable cost is $500. The firm
A) is maximizing its profit. B) is earning a profit, but not necessarily the maximum profit. C) is experiencing an economic loss. D) should shut down.
A competitive firm will maximize profits at that output at which:
A. total revenue exceeds total cost by the greatest amount. B. total revenue and total cost are equal. C. price exceeds average total cost by the largest amount. D. the difference between marginal revenue and price is at a maximum.
The ZZZ Corporation issued $25 million in new common stock in 2016. It used $18 million of the proceeds to replace obsolete equipment in its factory and $7 million to repay bank loans. As a result, investment:
A. has not occurred. B. of $7 million has occurred. C. of $18 million has occurred. D. of $25 million has occurred.
The most common type of firm in the United States is the
A) proprietorship. B) partnership. C) corporation. D) limited partnership.