Suppose Technological Improvements Reduced the Cost of Producing Automobiles by 50

question 13

Multiple Choice

Suppose technological improvements reduced the cost of producing automobiles by 50 percent, causing the price of automobiles to decline by a similar amount. Which of the following would necessarily result from this development?

• A) Employment in the automobile industry would decrease.
• B) Real income would increase.
• C) Real income would decrease.
• D) Both a and c are correct.

Understand various consumer product acquisition methods, including their benefits and limitations.

Understand the basic principles of consumer credit, including the cost and methods to use credit responsibly.

Identify the most common methods of calculating interest and their impact on borrowing costs.

Recognize the importance of the finance charge and annual percentage rate (APR) in evaluating credit costs.

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Definitions:

Internal State

Refers to an individual's psychological or emotional condition at a specific time.

Preoccupied

In attachment theory, a state characterized by excessive worry about relationships, leading to anxiety and overly needy behavior.

Feeling Guilty

The emotional state of being culpable or remorseful for an action or thought, often associated with the violation of one’s moral or ethical standards.

Diffusion of Responsibility

A phenomenon where individuals are less likely to take action or feel a sense of responsibility when others are present.