When the price of a product falls for a normal good, the:
A. Income and substitution effects will encourage consumers to purchase more of the product
B. Income and substitution effects will encourage consumers to purchase less of the product
C. Substitution effect will encourage consumers to purchase less of the product and the income effect will encourage them to purchase more
D. Substitution effect will encourage consumers to purchase more of the product and the income effect will encourage them to purchase less
A. Income and substitution effects will encourage consumers to purchase more of the product
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Harry's Hookahs incurs $700,000 per year in explicit costs and $500,000 in implicit costs. The company earns $1.4 million in revenues and has $3.7 million in net worth. Based on this information, what is the accounting profit for Harry's Hookas?
A) $200,000 B) $700,000 C) $900,000 D) $1.1 million
Why is the money multiplier smaller than the simple deposit multiplier?
What will be an ideal response?