Refer to Figure 10-9. The change in the budget constraint from BC1 to BC2 implies
A) income and the prices of DVDs and CDs have increased.
B) the price of DVDs has increased and the price of CDs has decreased.
C) the prices of DVDs and CDs have increased.
D) the price of DVDs has decreased and the price of CDs has increased.
B
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With increasing returns to scale, isoquants for unit increases in output become
A) farther and farther apart. B) closer and closer together. C) the same distance apart. D) none of these.
With reference to the graph above, if the intended aim of the price ceiling set at $6 was a net increase in the well-being of consumers, then positive analysis would consider:
A. whether the surplus transferred from consumers to producers is larger than the consumer surplus lost to deadweight loss.
B. whether the producer surplus lost to deadweight loss is larger than the producer surplus gained from a higher price.
C. whether the surplus transferred from producers to consumers is larger than the consumer surplus lost to deadweight loss.
D. whether the producer surplus lost due to lower prices is larger than the producer surplus lost due to fewer transactions taking place.
A diversified portfolio is comprised of
What will be an ideal response?
Governments like to know the price elasticity of demand because it helps them determine how changes in sales tax rates will affect:
A. tax revenues. B. government spending. C. income. D. profits.