Suppose you only consume food and clothing, and clothing is plotted on the vertical axis. Also, you purchase food at a fixed price (PF), but the price of clothing declines as you buy in larger quantities (i.e., quantity discounts)
What does the budget line look like in this case? A) The budget line is a straight line
B) The budget line is now concave to (bows out from) the origin
C) The budget line is now convex to (bows in toward) the origin
D) The budget line will not be a straight line, but it may be concave or convex
C
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If the nominal interest rate is 2 percent and the inflation rate is 4 percent, then the real rate of interest is
A) -2 percent. B) 2 percent. C) 3 percent. D) 6 percent.
If absolute property rights to an endangered resource are granted to someone who inefficiently manages the resource, explain what the Coase theorem predicts will happen to that resource
What will be an ideal response?
Which of the following will cause an upward movement along the aggregate supply curve?
a. An increase in the price level of all goods and services b. A decrease in the price level of all goods and services c. A technological improvement in the country d. An increase in the physical capital of a country
In what sense is capital accumulation costly to a society?