In a budget line/indifference curve figure, how do you identify the best affordable combination of any two goods?
What will be an ideal response?
Any combination of goods along the budget line is affordable. The best of these combinations is on the highest indifference curve. This best combination is where the indifference curve is tangent to the budget line, so this combination is the best affordable combination.
You might also like to view...
Equilibrium price and quantity are determined by the intersection of the demand and supply curves.
Answer the following statement true (T) or false (F)
In the mid-1830s, the U.S. entered an inflationary period that culminated in the depression of 1839-1843 . Contemporary economic historians attribute this economic downturn to
a. the demise of the Second Bank of the U.S. in 1832. b. over-issue of gold coins by the U.S. Mint. c. over-expansion by the manufacturing sector. d. external forces, including large inflows of specie from Mexico and Europe.
A portrait photographer produces packages of 100 photos. If sales increase from 600 to 700 packages, total revenue increases from $1,200 to $1,400 . The marginal revenue per photo of the 700th package is
a. $200 b. $100 c. $20 d. $2 e. $1
Answer the question based on the following information on the banking system. Deposits at the central bank = 200 U.S. Government Securities = 600 Checking Deposit = 1,700 Loans = 800 Stockholder's Equity = 70 Other Assets = 450 Other Liabilities = 230 Borrowing from the central bank = 100 Cash in the Vault = 50 The reserve ratio on checking accounts = 10% The monetary base:
a. cannot be determined from this information b. equals $250 c. equals $134 d. equals $2,100 e. none of the above