Assume that a consumer purchases only two products and there is a decrease in the consumer's income. The prices of the two products stay constant. The decrease in income will result in a:
A. Shift of the budget line inward to the left
B. Shift of the budget line outward to the right
C. A decrease in the slope of the budget line
D. An increase in the slope of the budget line
Answer: A
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Which of the following scenarios is an example of an investment in human capital?
A. A firm replaces manually controlled production with a computer-controlled procedure. B. A chemical firm supports research to develop new chemicals. C. A firm purchases new equipment for a manufacturing process. D. A firm pays for workers to take college classes.
A firm is operating at a scale where diseconomies of scale are present. Which of the following could help explain what that means?
a. The firm is operating at a scale where the average total cost of production is falling as output expands. b. The firm is operating at a scale where total fixed costs are not minimized c. The firm is operating at a scale where average total cost is constant as output expands. d. The firm has grown so large that average total cost increases as output expands.
If your latest test grade and your average test grade on previous exams are equal, your average test grade will:
A. fall. B. remain constant. C. be good enough to pass. D. rise.
In Figure 8.5, if this economy's inflation goal is a price level of P2 but the equilibrium price level is P3, an appropriate monetary policy lever would be to
A. Decrease AD by increasing interest rates. B. Increase AS by increasing the money supply. C. Decrease AS by increasing the money supply. D. Decrease AD by increasing income taxes.