Examlex

Solved

Assume There Is a Budget Line with Bagels on the Vertical

question 393

Multiple Choice

Assume there is a budget line with bagels on the vertical axis and bananas on the horizontal axis. What happens to the budget line when the price of bagels falls by 10% and the price of bananas falls by 20%?


Definitions:

Domestic Opportunity Cost

The cost of forgoing the next best alternative when choosing to produce a good or service domestically.

Comparative Advantage

The ability of an individual or group to carry out a particular economic activity (such as making a specific product) more efficiently than another activity.

Domestic Opportunity Cost

The cost of forgoing the next best alternative use of a country's resources when choosing to produce a particular good or service.

Domestic Supply

The total amount of a good or service that is available from domestic producers within a country, influencing national prices and availability.

Related Questions