Refer to Figure 10-9. If the consumer has $240 to spend on DVDs and CDs, what is the price of a DVD if the budget constraint is BC1?
A) $10 B) $20 C) $24 D) $40
B
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As an economy increasingly specializes in producing one good, the opportunity cost of that good increases. The opportunity cost increases because
A) not all goods are equally valuable. B) as more of a good is produced, the profit from its production must rise. C) resources are not equally productive in all activities. D) what must be paid to resources increases. E) human wants are virtually unlimited.
How is a production indifference map helpful?
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.
Stock and Watson found that monetary policy was responsible for about ________% of the reduction in output volatility that occurred in the mid-1980s.
A. 30 to 40 B. 20 to 30 C. 10 to 20 D. 0 to 10