If all prices, including the price of beef, increase by 3 percent, then the relative price of beef has ________ and inflation ________.
A. remained constant; has not occurred
B. increased; has occurred
C. remained constant; has occurred
D. increased; has not occurred
Answer: C
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Fred Monroe is a fisherman in the perfectly competitive fish industry in northern Minnesota. After years of experience, he knows that the demand curve for the fish he sells is
a. horizontal b. vertical c. downward sloping d. the same as the industry demand e. upward sloping
Suppose Raul has budgeted $100 of his monthly income towards two good: t-shirts and jeans. If the price of a pair of jeans is $20 and last month he spent his $100 on a bundle containing 2 pairs of jeans and 12 t-shirts, which of the following is another point on Raul's budget line?
a. 3 pairs of jeans and 16 t-shirts b. 1 pair of jeans and 15 t-shirts c. 3 pairs of jeans and 6 t-shirts d. 0 pairs of jeans and 20 t-shirts