Suppose a budget line is drawn with X on the horizontal axis and Y on the vertical axis. A decrease in the price of X will cause:
a. an increase in the vertical intercept and no change in the horizontal intercept.
b. a decrease in the vertical intercept and no change in the horizontal intercept.
c. an increase in the horizontal intercept and no change in the vertical intercept.
d. a decrease in the horizontal intercept and no change in the vertical intercept.
e. a parallel, rightward shift of the budget line.
c
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Which of the following is NOT an effect from a change in the federal funds rate?
A) change in the real interest rate B) change in investment C) change in government expenditures D) change in aggregate demand E) change in the quantity of money
Answer the following statements true (T) or false (F)
1) Each time a manager changes the conditions of a sale, they must consider the problem of adverse selection. 2) The lemons problem is an extreme case of moral hazard. 3) A well-known company's trademark is an example of a signal. 4) In general, moral hazard occurs at the time of the transaction and adverse selection occurs after the participants have already entered into the contract or agreement. 5) The incentive for a cost-plus-award-fee contract are less specific than a cost-plus-incentive-fee contract.
When there is a technological advance in the pork industry, consumer surplus in that market will
a. increase. b. decrease. c. not change, since technology affects producers and not consumers. d. not change, since consumers' willingness to pay is unaffected by the technological advance.
Exports minus imports equals net exports.
a. true b. false