When Relative Prices Change in an Exchange Economy, an Individual's

question 18

Multiple Choice

When relative prices change in an exchange economy, an individual's budget line:

• A)pivots at its intercept with an axis.
• B)shifts in the direction opposite the price change.
• C)pivots around her initial endowment.
• D)shifts in the direction of the price change.

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Definitions:

Bought

The past tense of buy, referring to the acquisition of goods or services in exchange for money.

Efficiency

Efficiency refers to the ability to accomplish a task or produce a desired outcome with the minimum amount of waste, expense, or unnecessary effort.

Goals and Tasks

Objectives that an organization or individual plans to achieve, along with the specific actions required to attain them.

Resources Available

The assets, materials, and other supplies that are readily accessible and can be used to achieve goals or complete tasks.