Which of the following will most likely happen when a person's income increases, other things equal?
a. The budget line will shift outward
b. The budget line will become steeper
c. The budget line will become flatter
d. The indifference curves will shift outward
e. The indifference curves will shift downward
a
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If firms differ in terms of their technologies, a drop in demand will cause a long run decrease in output price.
Answer the following statement true (T) or false (F)
Which of the following statements is correct?
a. It is impossible for a country to fix its exchange rate and have an independent monetary policy at the same time. b. Flexible exchange rates are always superior to fixed exchange rates. c. Whether flexible exchange rates or fixed exchange rates are better for a nation depends on the characteristics of the economy. d. The level at which the exchange rate is fixed does not have any implications on the amount of interaction needed by the central bank to sustain the regime of fixed exchange rate.
Recent changes in methods used to compute the CPI have made the
a. upward bias in the CPI inflation rate more severe than it used to be. b. upward bias in the CPI inflation rate less severe than it used to be. c. downward bias in the CPI inflation rate more severe than it used to be. d. downward bias in the CPI inflation rate less severe than it used to be.
At first patents might seem like a deterrent to growth because in effect they restrict the use of new technology. Yet many economists believe that patents generate growth. Explain why