Figure 5-16

Figure 5-16 shows Adam’s purchases of bananas and apples when apples cost $5 each and bananas $4 each. The information implies that Adam’s income

A. must be $9.
B. must be $20.
C. must be $40.
D. cannot be determined without further information.

Answer: B

Economics

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In 2012, the U.S. federal government had a budget deficit. If there is no Ricardo-Barro effect, the budget deficit ________ the real interest rate and ________ the equilibrium quantity of investment

A) lowered; increased B) raised; increased C) lowered; decreased D) raised; decreased E) did not change; did not change

Economics

If a firm is able to set price,

A) it is a monopoly. B) its marginal revenue is constant. C) it sells its output at a constant price. D) it faces a downward-sloping demand curve.

Economics