In the figure above, suppose the original budget line is BD. A rise in the price of a compact disc will
A) rotate the budget line to AD.
B) rotate the budget line to CD.
C) not move the budget line.
D) result in a parallel leftward shift of the budget line.
A
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The figure shows the market for college education. In order for the efficient amount of education to occur, the government could provide a subsidy of ________ per student
A) $4,000 B) $8,000 C) $12,000 D) $20,000 E) $16,000
Why is it important for economists to determine whether the velocity of money is constant or whether it is influenced by changes in the transactions demand for money?
Positive economics
a. postulates a relationship that is potentially refutable and then seeks to determine whether the stated relationship is correct. b. uses value judgments to determine which policy alternatives should be chosen. c. is of no use to policy makers because it reflects the value judgments of the researcher. d. is the scientific study of "what ought to be" among economic relationships.
Suppose OPEC succeeds in raising world oil prices by 300 percent. This price increase causes inventors to look at alternative sources of fuel for internal-combustion engines. A hydrogen-powered engine is developed which is cheaper to operate than gasoline engines. Which problems in the construction of the CPI does this situation represent?
a. substitution bias and introduction of new goods b. introduction of new goods and unmeasured quality change c. substitution bias and unmeasured quality change d. income bias and substitution bias