A college student decides to spend the afternoon watching three movies rented from Red Box. The cost of each movie is $1. The student was willing to pay $4 to rent each of the first two movies and $2 to rent the third movie. What was the marginal benefit received by the student when renting the 2nd movie?
A. $8
B. $1
C. $4
D. $2
Answer: C
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The multiple changes in income and output that results from a change in autonomous expenditure is called the multiplier
Indicate whether the statement is true or false
In recent years, technological improvements and the Internet have substantially reduced transaction costs and expanded the availability of low-cost access to information, communications, and entertainment. Most economists believe that these changes Select one:
a. cause GDP to overstate the growth rate of real output and the improvement in the well-being of people. b. cause GDP to understate the growth rate of real output and the improvement in the well-being of people. c. cause the consumer price index to increase more rapidly than the general level of prices. d. reduce the gains from trade and thereby cause GDP to decline.
The absolute value of the slope of the production possibilities curve is the
A. marginal rate of substitution. B. contract curve. C. offer curve. D. Engel curve. E. marginal rate of transformation.
Criteria used to predict the benefits of fixed exchange rates can be applied to benefits from an optimum currency union. Generally, benefits are higher whenever the:
A) home country has balanced trade with its union partners. B) home country's economy is dissimilar to that of its union partners. C) home country's economy is similar to that of its union partners and it suffers similar types of economic "shocks." D) home country has large and growing trade imbalances with its union partners.