The Shift of the Budget Line from Cd to Ab

question 130

Multiple Choice

The shift of the budget line from cd to ab in the figure is consistent with

• A)decreases in the prices of both M and N.
• B)an increase in the price of M and a decrease in the price of N.
• C)a decrease in money income.
• D)an increase in money income.

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Definitions:

Output

The total amount of goods or services produced by a company, industry, or economy.

Average Educational Level

A metric that represents the average amount of formal schooling completed by a population or specific group of people.

Productivity of Labor

A measurement of the output produced by employees or labor within a specific period of time.

Labor-Intensive

A type of production process or industry that requires a large amount of labor to produce goods or services, in comparison to capital.