A budget line shows the:
A. alternative combinations of two goods that a consumer can purchase with a given money
income.
B. alternative combinations of two goods that will yield the same level of total utility to a
consumer.
C. quantities of a particular good that a consumer will buy at various prices.
D. ratio of money income to product price.
Answer: A
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Which one of the following is a characteristic of capitalism but not of communism?
a. private property. b. wage payments. c. technological development. d. use of capital equipment.
Adverse selection in insurance requires that
a. all people face the same risk b. potential customers facing more risk are no more interested in purchasing insurance c. people are not risk averse d. insurers cannot tell higher risk people from lower risk people
A $10,000 ten-year bond was issued at an interest rate of 6%. Carla is thinking about buying this bond one year before the end of the ten years, but interest rates are now 9%. What is the maximum amount that Carla should pay for this bond?
a. $9,174.31 b. $9,378.25 c. $8,982.43 d. $9, 764.20
Based on the graph showing the Phillips curve, you would expect to see ______ at point A than at point B.
a. higher real wages
b. lower real wages
c. prices increasing faster
d. companies seeking more workers