When a consumer chooses the combination of goods and services to buy, what is she or he trying to achieve?
What will be an ideal response?
The consumer is trying to achieve the highest level of well being possible.
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Over the past 100 years real GDP per person in the United States, on average, has
A) decreased by about 5 percent per year. B) increased by about 2 percent per year. C) increased by about 5 percent per year. D) increased by about 10 percent per year.
If prices and income in a two-good society double, what will happen to the budget line?
A) The intercepts of the budget line will increase. B) The intercepts of the budget line will decrease. C) The slope of the budget line may either increase or decrease. D) Insufficient information is given to determine what effect the change will have on the budget line but we know society is worse-off. E) There will be no effect on the budget line.