The income of a consumer is $40, the price of A is $8, and the price of B is $4. If the quantity of A is measured vertically, then the slope of the budget line is:
A. 0.5
B. 1.0
C. 2.0
D. 2.5
C. 2.0
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The Federal Reserve can increase the money supply by:
A. reducing reserve requirements. B. increasing the discount rate. C. conducting open market sales. D. eliminating deposit insurance.
In order to make a rational choice, people must
A) decide quickly without wasting time. B) be able to afford the choice decided upon. C) determine what is in the social interest. D) only know what they want. E) compare marginal costs and marginal benefits.
The economic way of thinking would approach the question "Is this industry competitive?" by
A) counting the number of firms in the industry. B) comparing the ratio of prices to costs across the industry. C) assessing the freedom of entry into the industry. D) evaluating the actual structure of the industry to the competitive standards articulated in antitrust legislation.
Explanations for the decline in U.S. productivity in the 1970s and 1980s include all of the following except:
a. difficulties with measuring service sector output. b. the entry into the labor force of many young, inexperienced workers. c. a wave of corporate mergers that reduced competition. d. rising oil prices.