Suppose a budget line is drawn between pizza, on the horizontal axis, and tacos, on the vertical axis. How does a change in the price of a pizza affect the budget line?
What will be an ideal response?
When the price of the good measured on the horizontal axis, pizza, falls, the budget line rotates outward and becomes flatter. And, when the price of a pizza rises, the budget line rotates inward and becomes steeper.
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In general, trade restrictions penalize domestic producers and foreign consumers.
a. true b. false
Whenever marginal cost is positive, average cost curves are upward sloping.
Answer the following statement true (T) or false (F)
Refer to Figure 17-2. Suppose the economy is at point A in the figure above. Which of the following is true?
A) The current unemployment rate is 3.8% B) Actual Inflation is 1% C) The current unemployment rate is equal to the natural rate of unemployment D) The Economy will move from A to B E) The expected rate of inflation is 5.5%