A budget line can show all butoneof the following statements below. Which one does itnotshow?
A. The budget line shows the available choices to a household.
B. It is a curve of constant expenditure.
C. The slope of the budget line increases as the quantity of a good consumed increases.
D. The budget line shows how much it costs to purchase a combination of two goods, for a set income and prices.
Answer: C
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Tax cuts aimed at businesses can stimulate:
A. social spending. B. private consumption. C. investment spending. D. net exports.
The order of the letters along the rows of computer keyboards could be changed to allow users to type faster, but this would inconvenience the vast majority of people who learned to type with the current keyboard layout. The costs of switching to a new
layout make this change unlikely. This is an example of A) path dependency. B) how social influences overwhelm the substitution effect of a price change. C) how the elasticity of demand for typewriters has been affected by externalities. D) how consumers sometimes do not behave rationally.
The central institution through which a laissez-faire system answers the basic economic questions is the
A. tribal council. B. market. C. government. D. central planning body.