If the price of good X (measured on the horizontal axis of a budget line diagram) increases at the same time that the price of good Y (measured on the vertical axis) increases, the budget line
a. will necessarily become steeper
b. will necessarily become flatter
c. will remain unchanged
d. will shift outward in a parallel fashion
e. could become either steeper or flatter, depending on the sizes of the price changes
E
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Answer the following statement(s) true (T) or false (F)
1. When a two-part tariff is perfectly implemented, the monopoly charges a price that is greater than its marginal cost. 2. For a given quantity, a monopoly's marginal revenue is always greater than the price associated with that quantity. 3. When regulating a natural monopoly one should set the regulatory price such that the monopoly will produce the efficient level of output. 4. Deadweight loss because of a monopoly can be attributed to the fact that monopolies produce at a quantity where the price of the good exceeds the marginal cost of producing the last unit. 5. When there are significant differences among customers, a monopolist will look for opportunities to price discriminate.
When a nation exports a good or service in which it has a comparative advantage, employment in that industry
A) decreases. B) stays the same. C) increases. D) might change, but more information about what else the country exports is needed to determine if employment increases, decreases, or does not change. E) might change, but more information about what the country imports is needed to determine if employment increases, decreases, or does not change.
The demand for a good increases when the price of a substitute ________ and also increases when the price of a complement ________
A) rises; rises B) rises; falls C) falls; rises D) falls; falls
A ________ in market interest rates relative to the discount rate will cause discount borrowing to_______
A) fall; increase B) rise; decrease C) rise; increase D) fall; remain unchanged