The income effect refers to a change in:
a. income because of changes in the CPI.
b. the quantity demanded of a good because of a change in the buyer's real income.
c. the quantity demanded of a good because of a change in the buyer's money income.
d. none of these.
b
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The law of demand indicates that as the price of a good increases:
a. suppliers sell less of it. b. suppliers sell more of it. c. buyers buy less of it. d. buyers buy more of it.
In a simple lawn-mowing business where you have a push mower and labor as input, what would be the impact of adding an additional input in the form of a gas self-propelled mower (capital)?
A. Average product and marginal product would fall. B. Average product and marginal product would rise. C. Average product would rise, and marginal product would fall. D. Average product would fall, and marginal product would rise.