Assume That There Are Two Goods,x and Y

question 207

Multiple Choice

Assume that there are two goods,x and y.The quantity of good x is measured on the x-axis and the quantity of good y is measured on the y-axis.If the price of good y rises,then the

• A) y-axis intercept of the budget line increases.
• B) y-axis intercept of the budget line increases and the x-axis intercept of the budget line decreases.
• C) y-axis intercept of the budget line decreases and the x-axis intercept does not change.
• D) slope of the budget line changes.
• E) Both answers C and D are correct.

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Definitions:

Frederic Bastiat

A French economist and writer known for his advocacy of free markets and his critique of protectionism.

World Trade Organization

An international body that oversees global trade rules between nations, aiming to ensure trade flows as smoothly, predictably, and freely as possible.

Multinational Corporations

Large companies that operate and have assets in several countries, allowing them to produce and sell goods and services across national borders.

Trade Adjustment Assistance

A federal program designed to help workers who have lost their jobs as a result of international trade find new employment.