If a product's price falls and the consumer buys 4 units, as they did before the price change, then the:
A. budget line will be unaffected.
B. consumer will no longer be in equilibrium.
C. budget line may shift either outward from or inward to the origin.
D. budget line must shift inward to the origin.
Answer: B
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This Application refers to quantitative easing, a policy that occurs when the Fed
A) changes the reserve requirement. B) purchases long-term securities. C) raises the discount rate. D) sells mortgage-backed securities.
There is a double coincidence of wants when
A) person 1 has what person 2 wants, who in turn wants what person 3 has. B) person 1 has what person 2 wants, and person 2 has money. C) person 1 has what person 2 wants, and person 2 has what person 1 wants. D) person 1 has money, and person 2 has what person 1 wants.
The more inelastic the demand for a product, the more the actual burden of a tax on the product will:
a. fall on sellers. b. fall on buyers. c. fall equally on both buyers and sellers. d. create a larger deadweight loss (or excess burden).
Institutional barriers that impede human and physical capital investment are known as
A. The human capital effect. B. An illiteracy trap. C. The discouraged worker gap. D. An inequality trap.