A decrease in the price of a good enhances the consumer's purchasing power. The income effect applies to both normal and inferior goods by encouraging the consumer to purchase more

a. True
b. False

B

Economics

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Which of the following will hold true if the market for cameras is in equilibrium at a price of $40?

A) The quantity of cameras produced will equal the quantity of cameras bought in the market. B) Sellers of cameras will have an incentive to charge a price higher than $40. C) Buyers of cameras will want to buy fewer cameras than they are purchasing at equilibrium. D) If the cost of producing cameras falls below $40 per camera, all sellers will stop supplying cameras.

Economics

Does a 21 year old who inherited millions of dollars' worth of corporate stock and who never works supply anyone with productive services?

A) No, by definition. B) Only if her wealth is invested in capital equipment that adds to economic growth. C) Only if others are willing to pay to watch her enjoy life. D) Yes, if she supplies the services of the resources she owns.

Economics