When the consumer has found the best affordable bundle of goods:
A. the area above the indifference curve that runs through the consumer's best bundle does not overlap with the area below the budget line.
B. the area above the indifference curve that runs through the consumer's best bundle does not overlap with the area above the budget line.
C. the area above the indifference curve that runs through the consumer's best bundle should overlap with the area below the budget line.
D. the area above the indifference curve that runs through any bundle other than the consumer's best bundle does not overlap with the area below the budget line.
A. the area above the indifference curve that runs through the consumer's best bundle does not overlap with the area below the budget line.
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When you subtract the expected rate of inflation from the nominal rate of interest, you calculate the
a. real rate of interest. b. real rate of inflation. c. expected rate of interest. d. expected rate of price increases.
The change in disposable income is $200 and the change in saving is $50.What is the marginal propensity to consume (MPC)?
A) 0.25 B) 0.50 C) 0.66 D) 0.75 E) There is not enough information to answer the question.
Which of the following statements best describes a price floor?
a) A price that suppliers can be sure to receive for their output. b) A price floor will cause an excess supply of a good. c) A price higher than the market equilibrium price. d) All of the above.
If we observe that Jamie’s budget constraint has moved outward, then we know for certain that
a. the price of one or both of the goods must have decreased. b. she will be indifferent between goods X and Y. c. she can reach a higher indifference curve. d. her income must have increased.