If Consumers Enjoy an Increase in Wealth Due to Stock

question 27

Multiple Choice

If consumers enjoy an increase in wealth due to stock market gains,which of the following combinations of events will mostly likely take place?

• A) A downward shift of the aggregate expenditure line and a rightward shift of the AD curve
• B) A downward shift of the aggregate expenditure line and a rightward shift of the AD curve.
• C) An upward shift of the aggregate expenditure line and a leftward shift of the AD curve.
• D) An upward shift of the aggregate expenditure line and a rightward shift of the AD curve.
• E) An upward shift of the aggregate expenditure line and no shift in the AD curve.

Explain the relationship between marginal cost, marginal revenue, average total cost, and the firm's supply decision.

Describe the demand curve faced by perfectly competitive firms and its implications.

Recognize the impacts of market entry and exit on the supply, demand, and pricing in the long run.

Discuss the notion of economic versus accounting profits in the context of perfect competition.

---

Definitions:

Aggression

Different actions that could lead to either psychological or physical injury to oneself, other people, or environmental elements.

Social Scripts

Predefined, socially accepted sequences of actions that guide individuals' behaviors in specific situations or roles.

Scapegoat Theory

A psychological concept that suggests individuals or groups are unfairly blamed for problems or wrongdoings.

Modeling

A social learning process where individuals learn behaviors, skills, or attitudes by observing others.