A budget line shows:
a. the combinations of two goods that yield the same level of utility
b. the relationship between the price and the quantity supplied of a good or service.
c. the combinations of two goods that can be purchased at given prices with a given level of income.
d. the relationship between the price and the quantity demanded of a good or service.
c
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Moving down along the market demand curve for hot dogs, the
A) maximum price that people are willing to pay for hot dogs increases. B) marginal social benefit of hot dogs decreases. C) marginal social cost of hot dogs increases. D) consumer surplus of the last hot dog consumed increases.
Without a central bank, such as the Federal Reserve System, banks, if left to themselves, are likely to
a. create insufficient money when the economy is at full employment b. create too much money when the economy is in a recession c. forego money creation opportunities when the economy is at full employment d. hold less deposits than socially desirable when the economy is at full employment e. hold more excess reserves than socially desirable when the economy is in a recession
Suppose a new EU member begins substituting its imports from non-EU members to other EU members. This is an example of
A. trade deflection. B. trade diversion. C. free trade. D. trade detection.
A positive effect of advertising for society is that it:
A. Increases market share for the dominant firm in the industry B. Provides useful information to reduce search cost for consumers C. Raises barriers to entry into the industry and protects existing firms D. Creates price leadership and gives firms guidance in dealing with rivals