Refer to the budget line shown in the diagram above. Given the same money income, reductions in the prices of both products C and D will:
A) shift the budget line outward on the horizontal axis, but leave it anchored at "10" on the vertical axis.
B) shift the budget line to the left.
C) shift the budget line to the right.
D) have no effect on the budget line.
Ans: C) shift the budget line to the right.
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An incumbent firm uses limit pricing
A) to set price below a potential rival's marginal cost, thus making entry unprofitable. B) to set one price for a quantity of a good below a certain limit, and a second price for purchases above the limit. C) when it has no other advantages over a potential rival. D) if it is limited in the quantity of inputs it can purchase to produce output.
One of the challenges for development economists working in health care is to figure out a way to:
A. give doctors the right incentives to practice good medicine. B. force families to make better health care choices. C. influence markets in order to keep the costs of healthcare lower. D. alter the educational system in order to mandate that a certain number of students go into healthcare fields.
If the wage rate were $90, how many workers would be hired?
The Fed can change the money supply by buying or selling long-term Treasury bonds. Purchasing long-term securities is commonly called:
A. open market operations. B. discount operations. C. federal funds speculation. D. quantitative easing.