Suppose Morris earns $50 per week at his job and chooses to spend all of his income on either apples or biscuits. Suppose apples cost $5 per pound and a pack of biscuits costs $2 each. Which combination of fruits and biscuits will lie on Morris's budget constraint?
a. 6 pounds of apples and 12 packs of biscuits
b. 6 pounds of apples and 12 packs of biscuits
c. 5 pounds of apples and 8 packs of biscuits
d. 8 pounds of apples and 5 packs of biscuits
d
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The current account must necessarily always be in balance
Indicate whether the statement is true or false
Demand for clothing tends to be
a. elastic because there are few substitutes for clothing b. inelastic because there are few substitutes for clothing c. elastic because expenditures for clothing represent a large part of the consumer's budget d. inelastic because expenditures for clothing represent a large part of the consumer's budget e. elastic because it is a broadly defined good
If price and quantity are not at their equilibrium positions, then
A. government must intervene. B. a move to another position will help everyone. C. it is possible to reallocate so that some people are better off without harming others. D. a move to another position will not hurt anyone.
Which of the following is NOT an example of an activity with external benefits?
A. Having your car's faulty exhaust system repaired B. Eating a sandwich in the dining hall C. Installing smoke alarms in your house D. Planting flowers in your front yard