If a consumer's budget line between meat and potatoes has a vertical axis intercept at 100 pounds of meat and a horizontal axis intercept at 100 pounds of potatoes
a. demand must be inelastic
b. the consumer's budget must equal $100
c. both meat and potatoes must be priced at $1 per pound
d. the price of a pound of meat must equal the price of a pound of potatoes
e. the opportunity cost of meat in terms of potatoes cannot be determined
D
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The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output,
A) resource allocation is efficient. B) resource allocation is inefficient. C) too few tons of fertilizer are produced. D) consumers must pay too high a price for fertilizer.
The major problem facing the economy is high unemployment and weak economic growth. The inflation rate is low and stable. Therefore, the Federal Reserve decides to pursue a policy to increase the rate of economic growth. Which policy changes by the Fed would tend to offset each other in trying to achieve that objective?
A. Selling government securities and raising the discount rate B. Selling government securities and raising the reserve ratio C. Buying government securities and raising the discount rate D. Buying government securities and lowering the reserve ratio