Which of the following statements is true?
A) Optimization in levels is based on behavioral analysis.
B) Optimization in differences is based on marginal analysis.
C) Optimization in differences is often faster than optimization in levels, as it considers all aspects of the feasible alternatives.
D) Optimization in levels is often slower to implement than optimization in differences, as it considers only the aspects in which alternatives differ.
B
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If the long-run supply of rice is perfectly elastic, then
A) as people's incomes rise, the quantity of rice supplied decreases. B) as the price of corn falls, the quantity of rice demanded decreases. C) in the long run, a large rise in the price of rice causes no change in the quantity of rice supplied. D) in the long run, an increase in the demand for rice leaves the price of rice unchanged.
Suppose that the prices of good A and good B were to suddenly double. If good A is plotted along the horizontal axis,
A) the budget line will become steeper. B) the budget line will become flatter. C) the slope of the budget line will not change. D) the slope of the budget line will change, but in an indeterminate way.