What does a household's budget line show?
What will be an ideal response?
The budget line plots combinations of goods that require all a household's income and describes the limits to its consumption choices.
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Natural unemployment equals the sum of
A) cyclical and frictional unemployment. B) cyclical, business, and structural unemployment. C) frictional and structural unemployment. D) business and cyclical unemployment. E) cyclical and structural unemployment.
If the supply curve and the demand curve both shift to the left, then the new equilibrium:
A. price will be lower, but the direction of the change in quantity is uncertain. B. quantity will be higher, but the direction of the price change is uncertain. C. price will be higher, but the direction of the change in quantity is uncertain. D. quantity will be lower, but the direction of the price change is uncertain.
Use the above table. Assuming constant opportunity costs, the opportunity cost of producing donuts in country Alpha is ________, and the opportunity cost of producing donuts in country Beta is ________
A) 1 donut; 0.17 donut
B) 1 donut; 6 donuts
C) 10 donuts; 12 pizzas
D) 0.2 pizza; 1.67 donuts
Is the equation of exchange an economic model?
A. Yes, it is a simple but powerful model. B. No, economic models cannot be equations. C. No, it is merely an arithmetic statement. D. Yes, it is a cause-and-effect model.