Suppose that a consumer purchases just two goods, X and Y. The slope of the budget line would indicate the:
A. Opportunity cost of good Y in terms of good X given up for each unit of Y
B. Opportunity cost of good X in terms of good Y given up for each unit of Y
C. Maximum quantity of good Y that the consumer could buy with a given budget
D. Maximum quantity of good X that the consumer could buy with a given budget
Answer: B
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In 2007, Japan reported that its overseas assets totaled more than $4.6 trillion. This implies that Japan
A) is debtor nation. B) has a current account deficit. C) has a capital account deficit. D) is a creditor nation.
Total cost is equal to
a. TFC + TVC. b. TFC – TVC. c. TFC/TVC. d. TVC/TFC.
Assume the demand function for a particular good can be written as P = 150 - 6Q. When P = 12, the point elasticity of demand equals 2.08
Indicate whether the statement is true or false
Nowadays, most observers believe that monetary policy
a. is less important than fiscal policy. b. is more important than fiscal policy. c. and fiscal policy are equally important. d. and fiscal policy are both unimportant.