Which of the following is correct?
A. Budget lines are linear and upsloping; indifference curves are downsloping and concave to
the origin.
B. Budget lines are linear and downsloping; indifference curves are downsloping and concave
to the origin.
C. Budget lines are linear and downsloping; indifference curves are downsloping and convex
to the origin.
D. Budget lines are downsloping and convex to the origin; indifference curves are linear and
downsloping.
Answer: C
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A tax is structured so that the tax as a percentage of income declines as the level of income increases is called a(n):
a. flat tax. b. regressive tax. c. progressive tax. d. excise tax.
All else equal, what is likely to happen to the unemployment rate during a recession?
a. It increases as real GDP increases. b. It decreases as real GDP remains the same. c. It increases as real GDP decreases. d. It decreases as cyclical unemployment decreases. e. It decreases as real GDP decreases.
A market is in equilibrium:
A. provided there is no surplus of the product. B. at all prices above that shown by the intersection of the supply and demand curves. C. if the amount producers want to sell is equal to the amount consumers want to buy. D. whenever the demand curve is downsloping and the supply curve is upsloping.
If Apple's iTunes Music Store increases its "fee" for its music downloads, the law of demand predicts that
A) the number of iTunes music downloads would increase. B) there would be no change in the demand for iTunes music downloads. C) the number of iTunes music downloads would decrease. D) iTunes music supply would change but demand would not.