Assume the price of product Y (the quantity of which is plotted on the vertical axis) is initially $15 and the price of X (the quantity of which is plotted on the horizontal axis) is initially $3. Assume money income is initially $60. If the prices of Y and X now increase to $30 and $6 respectively and money income increases to $120, then the budget line will:
A) shift rightward and become steeper.
C) shift rightward, but its slope will not change.
B) shift rightward and become flatter.
D) be unchanged.
Ans: D) be unchanged.
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In 2012, the U.S. federal government budget had a budget deficit. If there is no Ricardo-Barro effect, this deficit ________ the demand for loanable funds and ________ the real interest rate
A) decreased; lowered B) did not change; did not change C) increased; raised D) decreased; raised E) increased; lowered
Which of the following firms is most likely to spend on innovation?
A) A perfectly competitive firm B) A monopoly with absolutely no competition C) A firm that is the only controller of a key resource necessary for production D) A firm that enjoys some monopolistic power, but faces strong competition from its rivals
Assuming that firms do not collude, compare the market outcome under oligopoly with the outcome under monopoly
What will be an ideal response?
Production possibilities frontiers cannot be used to illustrate tradeoffs
a. True b. False Indicate whether the statement is true or false