Suppose That Family a Borrows Money When Its Car Breaks

question 347

Multiple Choice

Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer. Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida. Which of the following is correct?

• A)Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on transitory income.
• B)Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income.
• C)Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income.
• D)Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on permanent income.

Identify factors leading to over-extraction or conservation of resources.

Learn about the dynamics of renewable resources and their sustainable management.

Comprehend the effects of market forces and external factors on the optimal extraction levels of resources.

Evaluate the role of property rights in resource conservation and the management of wildlife populations.

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Definitions:

Atomic Statements

The simplest type of statements that cannot be broken down any further into other statements, often considered the building blocks of logic.

Connectives

In logic and linguistics, connectives are words or phrases that connect sentences or phrases, such as "and", "or", "if...then", indicating the relationship between them.

Main Connective

In logic, the operator that determines the overall value of a compound statement, such as "and", "or", or "if... then".

Main Components

The primary or fundamental parts that make up a system, structure, or principle, essential for its functioning or understanding.