The quantity of good M is measured along the vertical axis, and the quantity of good N is measured along the horizontal axis. If the prices of both goods M and N declines by 50% each, then the budget line
A. shifts inward to the left by 50%.
B. rotates clockwise by 180 degrees.
C. shifts outward to the right by 100%.
D. shifts outward to the right by 50%.
Answer: C
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Economists who study economic mobility have found that, if a father earns 20 percent above his generation's average income, his son will most likely earn
a. an income equal to his generation's average income. b. 8 percent above his generation's average income. c. 5 percent below his generation's average income. d. 3 percent above his generation's average income.
Labor income includes:
A. wages, salaries, and earnings of the self-employed. B. interest, dividends, and rent. C. profits, royalties, and rent. D. payments to owners of factories, machines, and buildings.
Of the arguments for limiting trade, which one is the most appealing to economists?
A. protecting the jobs of citizens B. protecting the profits of companies C. preventing other countries from getting a comparative advantage by their use of child labor D. helping an industry that is in trouble
If an inverse relationship exists between two variables, then:
A. As one variable increases, the other decreases B. As one variable increases, so does the other C. The two variables are close substitutes for each other D. Both variables increase over time