Roger spends all of his money on racquetballs and food. What would happen to Roger's budget line if his income increased by 10 percent, holding prices constant?
a. It would shift inward.
b. It would rotate about the axis for food.
c. It would rotate about the axis for racquetballs.
d. Nothing would happen to the budget line, because the relative prices for food and racquetballs have not changed.
e. It would shift outward.
E
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A firm's decision to invest in a project is based on the
A) real interest rate and expected total revenue. B) nominal interest rate and expected total revenue. C) nominal interest rate and the expected profit. D) real interest rate and the expected profit.
Monopolistically competitive industries consist of
a. one firm selling several products b. one firm selling one product c. many firms, all selling identical products d. many firms, each selling a slightly different product e. many firms, each selling a completely different product
An increase in wages in the public sector is caused solely by increased labor productivity in that sector.
Answer the following statement true (T) or false (F)
What would happen in an economy if total planned production exceeded total planned real expenditures?
A. Inventories would accumulate, and firms would tend to lower prices. B. Inventories would be depleted, and firms would tend to raise prices. C. Inventories would accumulate, and firms would tend to raise prices. D. Inventories would be depleted, and firms would tend to lower prices.