"If Bill's income increases from $80,000 per year to $91,000 per year and he consumes pickup trucks and lamb chops with his money, Bill's budget line shifts outward and the increase in income means he can consume more trucks and more lamb
" Is this statement true or false? Briefly explain your answer.
The statement is true. The increase in Bill's income shifts his budget line outward and enables Bill to consume more trucks and more lamb chops.
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Not all in-kind transfers represent an improved standard of living
Indicate whether the statement is true or false
Which are social costs associated with the inability of shareholders to observe an executive's effort? (You may choose more than one.) a. Excessive insurance offered
b. The executive has to be exposed to risk to induce effort, and risk is costly. c. The executive ends up exerting less than first-best effort. d. Excessive effort induced.
Which of the following is least likely to be an effect of scarcity?
A) rationing device B) choice C) opportunity cost D) dollar price E) utility
A perfectly competitive industry is in long-run equilibrium. If demand for the product decreases, we can expect the price of the good to:
A. rise at first and then fall. B. fall at first and then rise. C. rise and remain at the higher price. D. fall and remain at the lower price.