In the above figure, the budget line will change from line DE to line DF when
A. the price of coffee decreases.
B. the price of bagels increases.
C. the price of coffee increases.
D. income rises.
Answer: A
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During the last decade, the price of a computer fell every year and the quantity sold increased every year. This experience suggests that the
A) "law of demand" was definitely contradicted. B) "law of supply" was definitely contradicted. C) demand curve shifted rightward. D) supply curve shifted rightward.
The biggest flaw in the logic of the labor argument is the failure to consider
A) the needs of developing countries. B) the impact of tariffs on inflation. C) the differences in national productivity levels. D) the impact on employment levels.
If one producer has control over an entire market and underproduces, the producer will
A) increase producer surplus by lowering pollution costs. B) increase consumer surplus by lowering producer surplus. C) increase both consumer and producer surplus. D) create a deadweight loss. E) decrease the deadweight loss that would exist if the market were efficient.
Using the above table, at a price of $5 there will be a
A) shortage of 20 units. B) shortage of 10 units. C) surplus of 20 units. D) surplus of 10 units.