Let the quantity of hamburgers be measured along the vertical axis and the quantity of movies be measured along the horizontal axis. If the price of a hamburger is $1.50 and the price of a movie is $6, then the slope of the budget line is
A. -0.25.
B. -3.
C. -4.
D. -6.
Answer: C
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Suppose the quantity demanded of cigarette cartons falls by 5% when prices are increased by 100%. The price elasticity of demand for cigarettes is
A) elastic and equal to 0.05. B) inelastic and equal to 0.05. C) elastic and equal to 20. D) inelastic and equal to 20.
Fiat money is generally issued by
A) brokerage firms. B) private banks. C) major multinational corporations. D) central banks.
Economists assume people are motivated by
A) unlimited resources. B) pride. C) self-interest. D) social justice.
In oligopoly, any action by one firm to change price, output, or quality causes
A) a reaction by other firms. B) no reaction from the other firms. C) a profit gain for the other firms. D) loss of market share by the acting firm.