Refer to the information provided in Figure 6.5 below to answer the question(s) that follow.
Figure 6.5Refer to Figure 6.5. Molly's budget constraint is EF. If her income decreases while the price of the goods are unchanged, her new budget constraint could be
A. BD.
B. CD.
C. AD.
D. Her new possible budget constraint is not shown on this graph.
Answer: B
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Both buyers and sellers are price takers in a perfectly competitive market because
A) each buyer and seller is too small relative to others to independently affect the market price. B) both buyers and sellers in a perfectly competitive market are concerned for the welfare of others. C) the price is determined by government intervention and dictated to buyers and sellers. D) each buyer and seller knows it is illegal to conspire to affect price.
________ in the foreign interest rate causes the demand for domestic assets to shift to the left and the domestic currency to ________, everything else held constant
A) An increase; appreciate B) An increase; depreciate C) A decrease; appreciate D) A decrease; depreciate
An economic benefit of contracts is that they
a. protect property rights b. encourage involuntary exchanges c. reduce the number of possible Pareto improvements d. encourage market concentration e. encourage specialization
Indirectly, the government has improved the quality of information available to consumers through
a. the SEC. b. its support for the Internet. c. the Federal Reserve System. d. requiring content labels on food products.