Demand and supply curves are drawn assuming ceteris paribus. This means that:
A) economists ignore all assumptions.
B) economists don't watch for the fallacy of false cause.
C) changes will be proportional.
D) all other things besides price and quantity are assumed unchanged.
Ans: D) all other things besides price and quantity are assumed unchanged.
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The above figure gives your budget line between CDs and magazines. Which of the following changes would NOT allow you to buy more CDs?
A) a decrease in the relative price of CDs B) an increase in income C) a decrease in the price of magazines with no change in the price of CDs D) None of the above answers is correct because all of the above changes allow you to buy more CDs.
The government can act to internalize externalities by taxing goods that have negative externalities and subsidizing goods that have positive externalities
a. True b. False Indicate whether the statement is true or false