If food is on the vertical axis and shelter on the horizontal axis, the slope of the budget line is given by
A. -Ps/Pf.
B. -Pf/Ps.
C. Pf/Ps.
D. Ps/Pf.
Answer: A
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What is the current equilibrium price level and real GDP for the economy illustrated in the figure above? Does this economy have an inflationary gap, a recessionary gap, or neither? As it adjusts toward full employment, which curve shifts?
What is the equilibrium real GDP and price level that the economy will ultimately reach?
As Betsy's consumption of coffee increases, her marginal utility from coffee
A) increases. B) decreases. C) remains unchanged. D) increases first and then decreases.
Households interact with business firms by:
a. buying resource services from business firms. b. paying wages for the use of labor. c. selling goods and services to firms. d. receiving payments from firms for use of resource services. e. paying rent to firms for the use of land.
A world-renowned brain surgeon can type twice as fast as her secretarial assistant. Which of the following statements is true in this situation?
a. The secretary has an absolute advantage in typing. b. The surgeon should do her own typing to save money. c. The surgeon should fire the assistant and work weekends and evenings to stay up on her typing. d. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the secretary has a comparative advantage in typing. e. The surgeon should spend her time doing brain surgery and allow her secretary to do the typing because the surgeon has a comparative advantage in typing.