A budget constraint is:
A. a line that is composed of all the possible combinations of goods and services that maximize a consumer’s total utility.
B. a line that is composed of the additional utility gained from consuming possible combinations of goods and services that a consumer can buy with his or her income.
C. a line that is composed of all the possible combinations of goods and services that a consumer can buy with his or her income.
D. a line that is composed of the total utility gained from consuming all possible combinations of goods and services that a consumer can buy with his or her income.
C. a line that is composed of all the possible combinations of goods and services that a consumer can buy with his or her income.
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Suppose early one Friday morning the economics club buys 200 donuts at 25 cents each, and plans to sell all of them later in day on campus for 50 cents each
Only 60 donuts are sold at 50 cents, however, and by early afternoon the club is seen trying to unload the remaining donuts for 10 cents each. What is the correct price of one of donut? A) 10 cents B) 25 cents C) 50 cents D) Stated this way, the question is meaningless.
The free rider problem is a situation in which
(a) effluents such as CFCs combine with ozone and decrease concentrations of that protective chemical. (b) one agent secures benefits that others pay for. (c) there are excessive subsidies given to polluting buses or other forms of mass transit. (d) perfect property rights exist.
Recessions occur at regular intervals and are possible to predict with much accuracy.
a. true b. false
An inflationary gap occurs when
A. short-run aggregate supply falls, but other things remain constant. B. the short-run equilibrium level of real GDP is greater than long-run aggregate supply. C. the short-run equilibrium level of real GDP is less than long-run aggregate supply. D. aggregate demand falls, but other things remain constant.