Figure 5-16
Figure 5-16 shows Adam's purchases of bananas and apples when apples cost $5 each and bananas $4 each. The information implies that Adam's income
a.
must be $9.
b.
must be $20.
c.
must be $40.
d.
Adam's income cannot be determined without further information.
b
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For a major country with extensive capital flows, what is the effect of a decrease in interest rates?
a. There will be an inflow of capital, a currency depreciation, and increased net exports. b. There will be an inflow of capital, a currency depreciation, and reduced net exports. c. There will be an outflow of capital, a currency depreciation, and increased net exports. d. There will be an inflow of capital, a currency appreciation, and reduced net exports.
Hold Jared's preferences for pizza and Pepsi constant. Suppose Jared's income, as well as the prices of pizza and Pepsi, double. As a result,
a. both Jared's indifference curves and his budget constraint change. b. Jared's indifference curves change, but his budget constraint does not change. c. Jared's budget constraint changes, but his indifference curves do not change. d. neither Jared's indifference curves nor his budget constraint change.