In drawing a budget line it is assumed that:
A) consumer preferences are fixed.
B) the prices of the two products are variable.
C) money income is fixed.
D) consumer willingness to substitute between the two products is fixed.
Ans: C) money income is fixed.
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If the players in the figure shown act in their own self-interest, then we know that Adidas will earn:
A. $2 million.
B. $8 million.
C. $6 million.
D. $10 million.
Which of the following occurs if firms are able to restrict output and raise price?
a. resources are misallocated b. wealth is shifted from consumers to government c. wealth is shifted from producers to consumers d. P = MC e. P = minimum LRAC
Figure 2-6
A shift in the production possibilities frontier from DC to EC in could be due to a
a.
technological improvement in the production of ice cream
b.
reduction in the rate of unemployment
c.
rise in the rate of unemployment
d.
technological improvement in the production of frozen yogurt
e.
fall in the demand for frozen yogurt
Which of the following explains why GDP per capita is likely to decline in less developed countries?
A. Unemployment growth is greater than population growth. B. Population growth is greater than inflation. C. GDP growth is greater than capital investment growth. D. Population growth is greater than GDP growth.