A budget constraint is a straight line because:
A) the tastes and preferences of the consumer change along the constraint.
B) a consumer faces a fixed price of both goods that do not change with changes in consumption.
C) the opportunity cost of buying each of the goods changes along the constraint.
D) a consumer has a limited money income.
B
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
When existing firms leave a perfectly competitive market, it causes:
A) an increase in the profitability of existing firms. B) a decrease in the profitability of existing firms. C) a right shift in the demand curve of the good being produced by the firms. D) a left shift in the demand curve of the good being produced by the firms.
Tax cuts on business income increase aggregate demand by increasing
A) wage rates. B) government spending. C) consumption spending. D) business investment spending.
If men, on average, earn 20 percent more than women in a particular occupation,
a. this is clear evidence of discrimination b. some of this differential could be due to differences in human capital c. most but not all of the differential is due to discrimination d. comparable worth laws must not be in effect e. men must have higher skills levels than women