Consider the change in the price of a book depicted in the above figure. The original budget line is BC. The new budget line is BD. As a result of this price change, the income effect can be represented by a movement from
A) point E to point F.
B) point G to point A.
C) point G to point F.
D) point A to point F.
A
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Economic growth can be shown by ____________________ production possibilities curve.
A. an outward shift of the B. an inward shift of the C. a movement from one point to another along the D. a movement to a point inside the
Which of the following is not a key idea in the economic way of? thinking
A. People make rational choices by comparing costs and benefits. B. Poor people are discriminated against and should be treated more fairly. C. A rational choice is made at the margin. D. Choices respond to incentives.
Refer to Table 4.1. A change in the price of hamburgers caused the change in quantity demanded shown in the table. The price elasticity of demand for hamburgers (calculated using the initial value formula) is:
A. 0.25. B. 0.50. C. 1. D. 1.75.
The cross-price elasticity between good X and good Y is positive. Other things being equal, if the price of X rises:
A. quantity of Y demanded decreases. B. quantity of Y demanded increases. C. a consumer spends more on good Y than on good X. D. a consumer spends more on good X than on good Y.