Suppose that the quantity of good y is measured along the vertical axis and that the quantity of good x is measured along the horizontal axis. If the price of good x is $5 and the price of good y is $10 when income is $200 per time period, the slope of the consumer's budget constraint will be
A. -0.5.
B. -5.
C. -2.
D. -10.
Answer: A
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You have noticed that your next-door neighbor, Mary, always works in the garden, and her husband, Joe, always walks the dog. You conclude that if Joe and Mary are efficient, then it must be the case that:
A. Mary has an absolute advantage in gardening. B. Joe experiences increasing opportunity costs when he gardens, but not when he walks the dog. C. Joe has a comparative advantage in walking the dog. D. Mary's opportunity cost of walking the dog is lower than Joe's.
China's economic reforms began in
A) 1960. B) 1978. C) 1991. D) 1998.
Suppose the price of pizza falls to $1 per slice. Assuming that Tom's preferences continue to be those shown in the above table, and assuming that MU/P = 3 is still the point at which his consumer optimum is reached, how many slices will Tom now buy?
A. 1 slice B. 2 slices C. 3 slices D. 4 slices
In a market economy, the allocation of the quantity supplied of any good among demanders is determined by
a. the needs of the individuals. b. the sellers. c. the market price. d. government regulations. e. a random process.