The slope of the budget line will change
A. when the consumer's income increases.
B. when the total satisfaction changes.
C. when the price of one of the products changes.
D. when the consumer's taste changes.
Answer: C
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Consider two resource markets in which the demand curves slope downward. In market A, the supply curve is horizontal, equilibrium price is $6, and 100 units of the resource are hired. In market B, the supply curve is vertical, equilibrium price is $20, and 30 units of the resource are hired. Which of the following is true?
a. Total resource earnings are the same in both markets. b. Total resource earnings are greater in market A. c. Total resource earnings are greater in market B. d. There is more economic rent in market A. e. There is derived demand in market A, but not in market B.
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
a. The creation of a supranational central bank reduced expected inflation. b. The supranational central bank increased the money supply rapidly, thereby causing interest rates to fall. c. Actually, interest rates in Italy exploded after the creation of the European Monetary Union, due to the lack of initial confidence in the European Central Bank. d. All of the above. e. None of the above.
Due to Pigou’s “defective telescopic faculty,” a market economy is inefficient in allocating resources between the present and the future.
Answer the following statement true (T) or false (F)
Undesirable job features lead to a ________ labor ________.
A. lower; demand B. higher; demand C. lower; supply D. higher; supply