If the slope of the indifference curve is steeper than the slope of the budget line, and X is on the horizontal axis:
A. the consumer is willing to give up more of good Y to get an additional unit of good X than is necessary under the current market prices.
B. the consumer is willing to give up more of good X to get an additional unit of good Y than is necessary under the current market prices.
C. MRS < ?PX/PY.
D. MRS < PX/PY.
Answer: A
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Refer to Figure 23-4. Potential GDP equals $500 billion. The economy is currently producing GDP1 which is equal to $450 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?
A) -$40 billion B) -$10 billion C) $10 billion D) $40 billion
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A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
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A. only unskilled labor B. only skilled labor C. only labor in general D. any factor of production