In a budget line/indifference curve diagram, at the consumer equilibrium
A) any movement upward or downward on the budget line will move the consumer to a less preferred point.
B) any movement to the northeast to higher indifference curves moves the consumer to a less preferred point.
C) the slope of the budget line is as much larger as possible than the marginal rate of substitution.
D) All of the above statements are correct.
A
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When the actual change in the price level differs from its expected change, which of the following can explain why firms might change their production?
a. both menu costs and mistaking a price level change for a change in relative prices b. menu costs but not mistaking a price level change for a change in relative prices c. mistaking a price level change for a change in relative price but not menu costs d. neither menu costs nor mistaking a price level change for a change in relative prices
A recession begins in January but government policy makers do NOT reach a consensus that a recession had in fact begun until June. This is an example of a(n)
A. effect time lag. B. quick time lag. C. recognition time lag. D. action time lag.