A beneficial supply shock would cause
A) a movement up the short-run Phillips curve.
B) a movement down the short-run Phillips curve.
C) the short-run Phillips curve to shift upward and to the right.
D) the short-run Phillips curve to shift downward and to the left.
D
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The magnitude of the slope of the budget line measures the
A) opportunity cost of the good on the horizontal axis in terms of the good on the vertical axis. B) opportunity cost of the good on the vertical axis in terms of the good on the horizontal axis. C) price elasticity of demand. D) price elasticity of supply.
A student buys only two goods pizza and books. The price of pizza is $5 and the price of books is $10. At the student's present level of consumption, her marginal utility of pizza is 4 and her marginal utility of books is 2. Currently, the student is spending all her income.A. Is this student currently in consumer equilibrium (maximizing utility)? Explain using a graph.B. What would this student have to do in order to increase her utility? Use the diagram from part (a) to explain your answer.
What will be an ideal response?