When two variables have an inverse relationship, the slope is
A) negative.
B) positive.
C) infinity.
D) zero.
Answer: A
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Suppose the government wants to discourage excessive consumption of alcohol. It therefore imposes a per-unit tax on alcohol that increases as more alcohol is bought by a consumer at a store. What happens to a consumer's budget at a liquor store (with liters of alcohol on the horizontal axis and a composite good on the vertical) --- assuming the consumer takes only one trip to the store.
A. The vertical intercept decreases and the slope becomes shallower as more alcohol is bought. B. The vertical intercept remains constant but the slope becomes shallower as more alcohol is bought. C. The vertical intercept decreases and the slope becomes steeper as more alcohol is bought. D. The vertical intercept remains constant but the slope becomes steeper as more alcohol is bought. E. None of the above.
Provide four reasons for the changes observed in per-pupil spending during the latter half of the twentieth century
What will be an ideal response?
Competitive pricing is efficient because
A) the price that consumers pay reflects the opportunity cost to society of producing the good. B) firms make positive economic profits in long-run equilibrium. C) average revenue equals average cost. D) firms produce above the minimum efficient scale.
In the antebellum period, U.S. cotton production
a. moved inland and westward following the invention of the cotton gin. b. was unable to meet the demand of the growing U.S. textile industry. c. was concentrated on small farms of less than 100 acres. d. faced declining world demand for most of the antebellum period.