The magnitude of the slope of the budget line
A) is defined as marginal rate of substitution.
B) equals the relative price of the good measured along the horizontal axis.
C) increases when income increases.
D) decreases when income increases.
B
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In fiscal year 2014, the U.S. federal budget deficit amounted to about:
a. 1.2% of GDP b. 3.7% of GDP c. 4.5% of GDP d. 10% of GDP
We can draw demand curves for firms in perfectly competitive and monopolistically competitive industries, but not for oligopoly firms. The reason for this is
A) there are no barriers to entry in perfectly competitive and monopolistically competitive industries. There are high barriers to entry in oligopoly industries. B) we can assume that the prices charged by perfectly competitive and monopolistically competitive firms have no impact on rival firms. For oligopoly this assumption is unrealistic. C) that perfectly competitive and monopolistically competitive firms are price takers. Oligopoly firms are price makers. D) perfectly competitive and monopolistically competitive firms sell standardized products. Oligopoly firms sell differentiated products.