Podcast
Questions and Answers
What happens to the budget line when there is an increase in income?
What happens to the budget line when there is an increase in income?
- It shifts to the right (correct)
- It shifts to the left
- It becomes steeper
- It remains the same
What is the effect of an increase in the price of one good on the budget line?
What is the effect of an increase in the price of one good on the budget line?
- It shifts the budget line to the left
- It swivels the budget line (correct)
- It remains the same
- It shifts the budget line to the right
What is the point of contact between the consumer's budget line and the highest indifference curve?
What is the point of contact between the consumer's budget line and the highest indifference curve?
- Budget equilibrium
- Consumer equilibrium (correct)
- Market equilibrium
- Price equilibrium
What happens to the quantity demanded of each good when there is an increase in income?
What happens to the quantity demanded of each good when there is an increase in income?
What is the effect of a decrease in the price of one good on the budget line?
What is the effect of a decrease in the price of one good on the budget line?
What is the slope of the budget line indicative of?
What is the slope of the budget line indicative of?
What happens to the purchasing power when the price of one good increases?
What happens to the purchasing power when the price of one good increases?
What is the name of the curve that represents different combinations of two goods that provide the same level of satisfaction?
What is the name of the curve that represents different combinations of two goods that provide the same level of satisfaction?
What is the name of the rate at which the consumer is willing to trade one good for another?
What is the name of the rate at which the consumer is willing to trade one good for another?
What is the law that states that the marginal rate of substitution will decrease as the quantity of one good increases?
What is the law that states that the marginal rate of substitution will decrease as the quantity of one good increases?
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