Which of the following is correct?
A. Budget lines are linear and upsloping; indifference curves are downsloping and concave to
the origin.
B. Budget lines are linear and downsloping; indifference curves are downsloping and concave
to the origin.
C. Budget lines are linear and downsloping; indifference curves are downsloping and convex
to the origin.
D. Budget lines are downsloping and convex to the origin; indifference curves are linear and
downsloping.
Answer: C
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If the quantity of housing demanded ________ the quantity of housing supplied, scarce housing resources are allocated efficiently because the marginal cost of the housing ________ the marginal benefit
A) is more than; equals B) is less than; equals C) equals; is more than D) equals; is less than E) equals; equals
Real estate suitable for condominium development is also suitable for single-family home development. Therefore, a rise in the price of condominiums relative to single-family homes tends to
A) increase the opportunity cost of building new single-family homes. B) reduce the demand for condominiums. C) increase the demand for condominiums. D) do none of the above.