Answer the following statement(s) true (T) or false (F)
1. A doubling of all prices has the same effect on the budget line as reducing income by half.
2. If the consumer's income doubles, then his optimal purchases of all goods will double.
3. If the consumer's income and all prices simultaneously triple, then his optimum will not change.
4. The slope of the budget line always equals the consumer's marginal value.
5. The budget line illustrates the consumer's opportunities and the indifference curve illustrates the consumer's preference.
1. True
2. False
3. True
4. False
5. True
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Economists believe that the best way to stimulate investment in physical capital is to encourage:
A) higher rates of investment in human capital. B) more spending on infrastructure. C) the conservation of natural resources. D) higher rates of national savings.
Differentiate between the quantity effect and price effect of a price cut by a monopoly
What will be an ideal response?