Suppose a Family's Budget Line Is Such That the Horizontal

question 11

Multiple Choice

Suppose a family's budget line is such that the horizontal axis shows the amount of food consumed, while the vertical axis has the consumption of all other goods. Suppose this family receives Food Stamps. Then this will cause the budget line to:

• A) pivot along the vertical axis
• B) pivot along the horizontal axis
• C) shifts right by the amount of food stamps, with the y-intercept a horizontal line at the original point
• D) shift to the left

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Definitions:

Entry Barriers

Factors that prevent or hinder the ability of a new firm to enter and compete in an industry.

Market Structures

The organizational and other characteristics of a market, including the number and size of firms, extent of competition, and type of product differentiation, impacting the behaviour and profitability of businesses within the market.

Quantity Effect

The change in total revenue resulting from a unit change in quantity sold, while holding price constant.

Price Effect

Describes how changes in prices impact the quantity supplied and demanded in a market.