The equation for a budget line for goods X and Y, with Px being the price of X, Py being the price of Y, and B being the budget, can be written as:
a. PxX + PyY = B.
b. PxX + PyY = 1 / B.
c. PxX = B + PyY.
d. PxX / PyY = 1 ? B.
a
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The actual value of price elasticity of demand
A) measures the relative change in quantity demanded when there is a change in price. B) will change when the units good is measured in changes. C) varies with changes in supply. D) is always negative.
The principle of specialization and exchange implies that
a. total production is highest when individuals specialize according to their absolute advantages b. productive inefficiency increases as producers in society specialize c. exchange can only occur when there is specialization in the economy d. gains from specialization will only occur when society is operating at a point along its production possibilities frontier e. total production is highest when individuals specialize according to their comparative advantages
Which of the following is often used by economists to assess income distribution?
a. Affordability Index b. Quintiles c. Consumer Price Index d. Quartiles
The reason that opportunity costs arise is that
A. people have unlimited wants. B. there are no alternative decisions that could be made. C. an economy relies on money to facilitate exchange of goods and services. D. resources are scarce.