Assume the graph shown represents Dana's budget constraint. If Dana's income to spend on these two items decreased, which of the following could be said?
A. Dana will buy more hairbands now because they are relatively less expensive.
B. Dana will be able to buy less of both goods.
C. Dana will derive more utility from each item, because she values each one more now that she's poorer.
D. All of these are true.
B. Dana will be able to buy less of both goods.
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A parent company rewarding managers on profit centers can simply
a. Subtract division costs from the division revenue and reward the manager on the difference b. Add the division costs to the division revenue and reward the manager on the sum c. Reward the manager on the revenue of the division d. Reward the manager on the costs of the division
The aggregate expenditures function (AE) is the total spending in an economy at a given: a. rate of interest
b. level of disposable income. c. level of autonomous investment. d. price level.
Economists and accountants have very different definitions of profit
a. True b. False Indicate whether the statement is true or false
In the long run, the price level in an economy is determined solely by:
a. the aggregate demand curve. b. the amount of cyclical unemployment in the economy. c. the long-run aggregate supply curve. d. the short-run aggregate supply curve. e. the actual output level.