Why are graphs such an important tool in economics?
Graphs allow us to express a substantial amount of information in a limited space and represent relationships between different variables.
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All else constant, an increase in the price of labor would cause the total amount of output that can be produced with a fixed amount of spending to ________. This would result in a movement to a ________ isoquant
A) increase; lower B) increase; higher C) decrease; lower D) decrease; higher
Sarah's demand curve for whiskey has the same slope as Pete's; however, it lies to the right of Pete's. An increase in the price of whiskey will cause
A) Sarah to incur a greater loss of consumer surplus than Pete will. B) Pete to incur a greater loss of consumer surplus than Sarah will. C) Sarah and Pete to incur the same loss of consumer surplus. D) Sarah's demand curve to shift closer to Pete's.
Which of the following events would produce an upward shift in the consumption function, other things being equal?
A. an increase in consumer wealth B. a decrease in consumer wealth C. a decrease in autonomous consumption D. an increase in the interest rate
The demand curve for British pounds (in terms of U.S. dollars) is ________.
A. downward-sloping because a higher dollar price of pounds means British goods are cheaper to Americans B. downward-sloping because a lower dollar price of pounds means British goods are more expensive to Americans C. downward-sloping because a lower dollar price of pounds means British goods are cheaper to Americans D. upward-sloping because a lower dollar price of pounds means British goods are cheaper to Americans