Government decreasing taxes is an example of:
A. expansionary fiscal policy.
B. contractionary fiscal policy.
C. expansionary monetary policy.
D. contractionary monetary policy.
A. expansionary fiscal policy.
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Last year in Candamica, consumption expenditure was $20 billion, interest, rent, and profit were $2.5 billion, government expenditure on goods and services was $7 billion,
net exports of goods and services was $5 billion, and investment was $2 billion. Hence total expenditure was A) $24.5 billion. B) $34.5 billion. C) $36.5 billion. D) $34 billion. E) undetermined without information about imports.
If marginal profit is zero, then average profit is at a maximum.
Answer the following statement true (T) or false (F)
In the above figure, if the market price is $10, the firm
A) produces 10 units. B) produces 12 units. C) shuts down operations. D) produces 11 units.
What is the definition of producers' surplus?
A) price received minus maximum selling price B) maximum selling price minus price received C) price received minus minimum selling price D) highest price minus lowest price E) none of the above