When the good on the vertical axis is a composite good, the slope of the budget line is equal to minus the price of the good on the horizontal axis.
Answer the following statement true (T) or false (F)
True
Rationale: The price of composite goods is 1 --- which means that the usual slope -p1/p2 becomes -p1.
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The price of season tickets to a performing arts theater decreases by 3%. As a result, the quantity demanded increases by 6%. The price elasticity of demand for season tickets is
A. -2. B. -18. C. -9. D. -0.5.
The hypothesis that individuals base consumption on their expected long run average income is the
A) life cycle hypothesis. B) forward looking expectation hypothesis. C) permanent-income hypothesis. D) None of the above.
The signals that guide the allocation of resources in a market economy are
a. surpluses and shortages. b. quantities. c. government policies. d. prices.
Which of the following statements is false?
a. The sum of the unemployment rate and the employment rate always equals 100 percent. b. The sum of the number of employed persons and the number of unemployed persons equals the civilian non-institutional population. c. The labor force participation rate equals the number of persons in the civilian labor force divided by the number of persons in the total population. d. a, b, and c