Suppose the Price of a Is $20 Per Unit, the Price

question 23

Multiple Choice

Suppose the price of A is $20 per unit, the price of B is $10 per unit, and the consumer's income is $1000 per month. Which of the following baskets is not on the consumer's budget line?

• A) A = 40, B = 20
• B) A = 5, B = 90
• C) A = 2.5, B = 95
• D) A = 20, B = 40

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Definitions:

Government Purchases

Expenditures made by the government for goods and services that directly satisfy the needs of the community or help in the production of further goods.

Taxes

Mandatory monetary fees or different forms of charges levied on taxpayers by government entities with the purpose of financing government operations and a range of public spending.

Fiscal Policy

Government adjustments to its spending levels and tax rates to monitor and influence a nation’s economy.

Government Spending

The total amount of money spent by the government, including expenditures on public services, defense, infrastructure, and social welfare programs.