Refer to Figure 21-5. Assume that a consumer faces the budget constraint shown in graph
(a) In January and the budget constraint shown in graph
(b) In February. If the consumer's income has remained constant, then what has happened to prices between January and February?
A. The price of X has fallen, but there could not have been a change in the price of Y.
B. The price of Y has fallen, but there could not have been a change in the price of X.
C. The price of X has fallen, and the price of Y has risen.
D. The price of Y has fallen, and the price of X has risen.
Answer: C. The price of X has fallen, and the price of Y has risen.
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The cross elasticity of demand between DVDs and DVD players is likely to be
a. zero. b. positive. c. negative. d. undefined.
Using the data in the table above, the growth rate of real GDP for 2010 is equal to
A) 4.76 percent. B) 10.0 percent. C) 9.09 percent. D) 5.00 percent. E) 7.00 percent.
If the government undertakes expansionary fiscal policy, it:
A. could increase income taxes. B. expects aggregate demand to increase. C. expects aggregate demand to decrease. D. should force people to change their spending patterns.
You want to buy a TV that regularly costs $250. You can either buy the TV from a nearby store or from a store that's downtown. Relative to going to the nearby store, driving downtown involves additional time and gas. The downtown store, however, has a 10% off sale this week. Last week you drove downtown to save $20 on some concert tickets, a 15% savings. Should you drive downtown to buy the TV?
A. Yes, because you will save more than $20. B. Yes, because you will save 10%, which is better than nothing. C. No, because you will only save 10%, which is less than 15%. D. No, because you will save more than $20.