The above figure shows Jane's budget line and two of her indifference curves. Which of the following happens to Jane's budget line if the price of a lobster dinner increased?
A) It would rotate inward around the vertical intercept, 10 lobster dinners.
B) It would rotate outward around the vertical intercept, 10 lobster dinners.
C) It would rotate inward around the horizontal intercept, 20 steak dinners.
D) It would rotate outward around the horizontal intercept, 20 steak dinners.
C
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Which of the following statements is CORRECT?
A) When demand increases, both the price and the quantity increase. B) When demand decreases, the price rises and the quantity decreases. C) When supply increases, the quantity decreases and the price rises. D) When supply decreases, both the price and the quantity decrease.
For the most part, central bank credibility, or lack thereof, is reflected in the behavior of ________
A) short-run aggregate supply B) short-run aggregate demand C) long-run aggregate supply D) aggregate price shocks
The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
a. fall on sellers. b. fall on buyers. c. fall equally on both buyers and sellers. d. create a larger deadweight loss (or excess burden).
Figure 4-25
Refer to . After the tax is levied, consumer surplus is represented by area
a.
A.
b.
A + B + C.
c.
D + E + F.
d.
F.