Why is the budget line negatively sloped?
What will be an ideal response?
Given the consumer's budget and the prices for two goods, if a consumer buys more of one good, he or she must buy less of the other. The budget line shows the trade-off between the two goods, that is, as more of one is purchased, less of the other can be purchased.
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Which of the following is the best indicator of the performance of the national economy?
a. The budget deficit of the federal government b. The stock of capital goods (machinery) in the nation c. The nation's stock of money d. The balance of trade with other nations e. The value of the final goods and services produced in the nation
Which of the following is a defining characteristic of all perfectly competitive markets?
A. Consumers display strong brand loyalty. B. All firms sell the same standardized product. C. Each firm in the market faces a perfectly inelastic demand curve. D. The market demand curve is perfectly elastic.