The net worth of a bank is defined as the difference between
a. income and expenses.
b. assets and liabilities.
c. loans and deposits.
d. loans and reserves.
b
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Consider a consumer with a choice set that emerges from an exogenous income I. Suppose that, as a result of changes in a consumer's economic circumstances, the budget line rotates outward, with the vertical intercept remaining unchanged but the horizontal intercept shifting to the right. Demonstrate, using the budget line equation, how this could have happened if the price of the good on the horizontal axis did not change?
What will be an ideal response?
If a firm in a monopolistically competitive market has a demand curve shifting to the right, it is likely that:
A. the selling price is less than the average total cost of the firm. B. positive economic profits are being earned. C. firms are entering the market. D. All of these statements are true.