Suppose a consumer consumes two goods, X and Y. The slope of the budget constraint equals the
a. marginal rate of substitution.
b. rate at which the consumer will give up X to gain Y while maintaining the same level of utility.
c. relative price of the two goods.
d. All of the above are correct.
c
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An increase in the demand for chicken is predicted to ________ the real wage and ________ employment of unskilled workers in a poultry processing plant.
A. increase; increase B. decrease; decrease C. increase; not change D. increase; decrease
Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
The price of a cowboy hat is $100. Willie is willing to pay $130, Waylon is willing to pay $100, and Merle is willing to pay $85. All of the following statements are true EXCEPT:
A) Merle's consumer surplus is $15. B) The sum of consumer surplus will be $30. C) Waylon's consumer surplus is $0. D) Only Willie and Waylon will purchase the cowboy hat. E) Willie's consumer surplus is $30.
If the problem of asymmetric information is so serious that a lender chooses not to lend to any potential small business borrower, then the problem is
A) moral hazard. B) adverse selection. C) market failure. D) disintermediation.