A reduction in the marginal tax-rate includes a substitution effect that tends to increase saving
a. True
b. False
Indicate whether the statement is true or false
True
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Assume that the full-employment level of output is $600 and the price level associated with full-employment output is 100. Also assume that the economy's current level of output is $550 and at the price level of 100 current aggregate demand is $465. If the government wants to move the economy back to the full-employment level of output and the MPC is 0.9, then it should reduce taxes by
A. $50. B. $5. C. $15. D. $135.
Which of the following is not a problem for the price system allocating resources among different time periods?
A. Interest rates are used for a variety of purposes other than influencing investment. B. The market devotes too much to immediate consumption. C. Our market system leads to lesser real incomes for later generations. D. Our market system despoils irreplaceable natural resources.
Refer to Figure 3-8. The graph in this figure illustrates an initial competitive equilibrium in the market for motorcycles at the intersection of D1 and S2 (point B)
If there is an increase in number of companies producing motorcycles and a decrease in income (assume motorcycles are a normal good), the equilibrium could move to which point? A) A B) B C) C D) E
Refer to the information provided in Figure 8.4 below to answer the question(s) that follow. 
Figure 8.4 Refer to Figure 8.4. Micro Oven's average fixed costs of producing nine units of output are
A. $25. B. $33.33. C. $55.55. D. indeterminate from this information.