In order to maximize profits, a firm should decrease output whenever total cost exceeds total revenue

What is the benefit of understanding the income and the substitution effects?

A) The income effect might run in the opposite direction of the substitution effect. B) The income effect always runs in the opposite direction of the substitution effect. C) The income and substitution effects just offset each other, which explains a lot. D) The income and substitution effects are proportional to each other.

Which of the following economic regions has experienced the least growth in real GDP per capita since 1820?

A. Africa. B. Asia excluding Japan. C. Latin America. D. Western Europe.