The income effect of an increase in the price of salmon
A) refers to the effect on a consumer's purchasing power which causes the consumer to buy less salmon, holding all other factors constant.
B) is the change in the demand for salmon when income increases.
C) refers to the relative price effect—salmon is more expensive compared to other types of fish—which causes the consumer to buy less salmon.
D) is the change in the demand for other types of fish, say trout, that results from a decrease in purchasing power.
A
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According to Adam Smith
A) government intervention in markets is not desirable because an invisible hand leads decisions made in pursuit of self-interest to unintentionally promote the social interest. B) politicians are well-equipped to regulate corporations and intervene in markets to improve market outcomes. C) when big corporations pursue their self-interest of maximum profit, they will inevitably conflict with social interest. D) in a market transaction buyers can either get what they want for less than they would be willing to pay or sellers can earn a profit, but both buyers and sellers can't gain simultaneously.
The opportunity cost of being unemployed tends to be the highest in which of the following countries?
A) Canada B) France C) the United Kingdom D) the United States