The opportunity cost of increased production of some good can be measured with
A. the slope of a ray to the production possibilities curve.
B. the area under the curve of a production possibilities curve.
C. the area of the rectangle bounded by the axes and the point on the production possibilities curve.
D. the slope of the production possibilities curve.
E. All of the responses are correct.
Answer: D
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The idea that individuals should be taxed in proportion to the marginal benefits that they receive from public goods is called
A) the horizontal-equity principle. B) the ability-to-pay principle. C) the benefits-received principle. D) the vertical-equity principle.
If foreign interest rates rise
A) the demand for domestic currency rises, causing it to appreciate. B) the demand for domestic currency falls, causing it to depreciate. C) the demand for domestic currency rises, causing it to depreciate. D) the demand for domestic currency falls, causing it to appreciate.
If a $30 increase in U.S. exports to France causes a $150 increase in U.S. national income, the value of the marginal propensity to consume in the U.S. is
a. 5 b. 0.20 c. 3 d. 0.80 e. not discernible given the information provided
Figure 7-4
Which of the following is true for the demand curve depicted in ?
a.
An increase in price from $2 to $3 will reduce total expenditures on the product.
b.
In the $2 to $3 range, the price elasticity of the demand curve is approximately unitary.
c.
At a price of $2, the price elasticity of the demand curve equals approximately -2.5.
d.
In the $2 to $3 range, the demand curve is inelastic.