Lizzie's budget line is shown in the figure above. If Lizzie's income increases, her 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 aggregate demand curve shows total expenditures at different levels of national income.
Indicate whether the statement is true or false
Ques. 3The Coase Theorem is the proposition that private economic transactions are efficient if the number of involved parties is small, if property rights ________, and transactions costs are ________.
A) exist; high
B) exist; low
C) do not exist; high
D) do not exist; low
Ques. 4The table above gives some of the accounts of the United States in 2020.
a) What is the private sector balance?
b) What is the government sector balance?
c) What is net exports?
Ques. 5Because of a decrease in the wage rate it must pay, a perfectly competitive firm's marginal costs decrease but its demand curve stays the same. As a result, the firm
A) decreases the amount of output it produces and raises its price.
B) increases the amount of output it produces and lowers it price.
C) increases the amount of output it produces and does not change its price.
D) decreases the amount of output it produces and lowers its price.
Ques. 6Which of these is NOT a potential source of inefficiency?
A) external benefits
B) increasing marginal costs
C) monopoly
D) subsidies
Ques. 7An increase in the price of a firm's product
A) decreases its value of marginal product of labor.
B) increases its demand for labor.
C) increases its supply of labor.
D) None of the above answers is correct.
Ques. 8The above figure shows the demand and cost curves for a firm in monopolistic competition. In the figure, the firm makes an economic profit of
A) 0.
B) 20.
C) 40.
D) 120.
Ques. 9A trigger strategy can be used in
A) a single-play game or a repeated game.
B) a single-play game but not a repeated game.
C) a repeated game but not a single-play game.
D) neither a single-play game nor a repeated game.
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