The multiplier principle is important because it
a. was central to economic theory before Keynes.
b. implies that investment will help stabilize the economy.
c. shows why small shifts in investment have a powerful influence on national income.
d. illustrates why a small change in income causes a large change in saving.
C
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Refer to Figure 10.1. When each player plays his or her dominant strategy, society is poorer and the payoffs are smaller by ________ units than if each player had played the strategy with the ideal outcome for both the individual players and for the
group as a whole. A) 6 B) 12 C) 18 D) 30
Which of the following is a factor of production that generally is fixed in the short run?
A) a factory building B) water C) raw materials D) labor
Draw two graphs: one showing the relationship of average product, marginal product, and total product; the other showing the relationship of AFC, AVC, and ATC. Then relate the shape of the marginal product to that of the marginal cost.
What will be an ideal response?
A consumer's optimum is found when
A) prices of goods go down. B) the consumer is achieving the maximum level of utility given market prices and their limited income. C) the marginal utility of the last dollar spent equals 0 for every good. D) the consumer saves part of their income.