When the aggregate expenditures of a nation exceed its output, _____
a. the nation's inventories fall
b. the government purchases of goods and services fall
c. the nation's firms decide to decrease their level of production
d. there will be an inflationary increase in the price level
a
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Consider a consumer choosing between spending her money on food, F, or clothing, C. Assume that a unit of food and a unit of clothing have the same price, and that the consumer can afford a total of 20 units of either food or clothing. The benefit of food is given by B(F) = 100?F, with MB(F) = 50/?F. The benefit of clothing is given by B(C) = 25C, with MB(C) = 25. How many units of clothing should the consumer buy?
A. 0 B. 2 C. 4 D. 6
If the CPI rose from 200 in 1992 to 260 in 1996, by what percentage did prices increase?
What will be an ideal response?
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.
When demand is inelastic, a decrease in price will result in an increase in total revenue.
Answer the following statement true (T) or false (F)