If the prices of both goods increase by 10 percent, the budget line
a. shifts to the right in parallel fashion.
b. shifts to the left in parallel fashion.
c. is unaffected since only relative price changes matter.
d. pivots on the axis of the more expensive good.
b
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When firms in an industry reach an agreement to fix prices, divide up market share, or otherwise restrict competition, they are practicing the strategy of
A. price leadership. B. collusion. C. interindustry competition. D. limit pricing.
Price controls often generate
A) more efficient markets. B) black markets. C) rapid adjustment to market-clearing prices. D) greater price flexibility.
Spending money on a new car instead of a used car when you are on a fixed budget is an example of:
A. the incursion of an opportunity cost. B. isolating variables. C. a bad thing to do because you run out of money. D. living on the edge.
Assume an economy experiences, for a given period, a 4% increase in output and a 4% increase in productivity. Given this information, we know that which of the following occurred for this economy during this period?
A) The unemployment rate increased during this period. B) The unemployment rate decreased during this period. C) The unemployment rate did not change during this period. D) The effects on the unemployment rate are ambiguous. E) none of the above