Which of the following statements about a consumer's budget line is correct?I.The budget line shows all the combinations of two goods that exhaust the consumer's budget.II.The slope of the budget line shows the market tradeoff between two goods.III.The budget line represents the consumer's preferences or tastes.
A. I only
B. I and II only
C. I and III only
D. II and III only
Answer: B
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Net exports equals
A) exports divided by imports. B) the sum of exports and imports. C) exports minus imports. D) exports during the year. E) none of the above
Monetary policy to stabilize the nation is less desirable whenever:
A) the nation is a net external debtor with liabilities denominated in foreign currency. B) the nation is a net external creditor with assets denominated in foreign currency. C) the central bank of the nation must also finance government deficits. D) the government is unable to raise taxes sufficiently to lower its deficit.
When a new product is introduced in the market, a consumer always wants to see how popular the item becomes before she purchases it. The consumer's behavior is known as
A. a network effect. B. a rational decision. C. overt collusion. D. an irrelational choice.
Which of the following is NOT an example of a supply shock?
A) a drought in the Midwest B) a decline in natural gas prices following discovery of new fields C) the introduction of a new line of computer-controlled machine tools in manufacturing D) a substantial increase in federal government spending on Medicare