If the prices of both goods increase by 10 percent, the budget line
A. shifts to the right in parallel fashion.
B. shifts to the left in parallel fashion.
C. is unaffected since only relative price changes matter.
D. pivots on the axis of the more expensive good.
Answer: B
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Everything else held constant, a depreciation of the domestic currency will cause the IS curve to shift to the ________ and aggregate demand will ________
A) right; increase B) right; decrease C) left; increase D) left; decrease
A firm sells a product in a purely competitive market. The marginal cost of the product at the current output of 1,000 units is $2.50. The minimum possible average variable cost is $2.00. The market price of the product is $2.50. To maximize profits or minimize losses, the firm should:
A. Continue producing 1,000 units B. Continue production, but produce less than 1,000 units C. Increase production to more than 1,000 units D. Shut down
In a labor market with one employer, the MLC is
a. above the supply curve of labor b. above the demand curve for labor c. what determines the wage rate d. downward sloping e. horizontal
An increase in the marginal propensity to consume (MPC) will, other things constant
What will be an ideal response?