Lizzie's budget line is shown in the figure above. If the price of a magazine falls, the budget line
A) shifts rightward and its slope does not change.
B) shifts leftward and its slope does not change.
C) becomes flatter.
D) becomes steeper.
Ques. 2The demand for corn increases. As a result, the price of corn will ________, and the less elastic the supply of corn, the ________ will be the effect on the price.
A) fall; smaller
B) fall; greater
C) rise; smaller
D) rise; greater
Ques. 3Sonya's budget for magazines and chocolate bars is 50. Her marginal utility from these goods is shown in the table above. If the price of a magazine is 5 and the price of a chocolate bar is 2.
50, which of the following combinations maximizes Sonya's utility? A) 1 magazine and 18 chocolate bars
B) 2 magazines and 20 chocolate bars
C) 3 magazines and 14 chocolate bars
D) 5 magazines and 10 chocolate bars
Ques. 4In the figure above, the richest 20 percent of all households receive what share of all income?
A) 10 percent
B) 20 percent
C) 30 percent
D) 40 percent
Ques. 5According to the Coase theorem, which of the following are necessary for the efficient levels of pollution to be achieved? I. Property rights are defined. II. Transactions costs are low.
A) I only
B) II only
C) both I and II
D) neither I nor II
Ques. 6If the price of a firm's output rises, its
A) marginal product of labor increases.
B) value of marginal product decreases.
C) demand for labor increases.
D) demand for labor decreases.
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