The slope of the budget constraint line is the
A. ratio of different levels of income.
B. income of consumers divided by the price of each good.
C. ratio of this year's income to last year's income.
D. rate of exchange between the two goods.
Answer: D
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Three policy lags limit the effectiveness of monetary policy: recognition lags, implementation lags, and impact lags. Of these three policy lags, fiscal policy is impacted by
A) only implementation and impact lags. B) only recognition and implementation lags. C) only recognition and impact lags. D) all three policy lags.
People make mistakes in allocating their time
a. only when leisure time is an inferior good b. because expectations are not always fulfilled c. more often when the cost of making a mistake is high d. only when economists remove the assumption that individuals are rational e. because information is free and readily available
Which of the following helped reduce sulfur dioxide emissions, a leading cause of acid rain? (i) corrective taxes (ii) tradable pollution permits (iii) amendments to the Clean Air Act
a. (i) only b. both (i) and (ii) c. (iii) only d. both (ii) and (iii)
A farmer has 1,000 acres on which he has previously grown corn. His yield per acre is 100 bushels of corn. If the corn payment rate is $0.43 a bushel, his production flexibility contract payment equals
A) $39,600. B) $43,000. C) $36,550. D) $12,345. E) none of the above