Suppose total benefits and total costs are given by B(Y) = 100Y ? 8Y2 and C(Y) = 10Y2. Then marginal costs are:
A. 20Y2.
B. 20Y.
C. 5Y.
D. 40.
Answer: B
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Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
Refer to Figure 15-4. What is likely to happen to this monopoly in the long run?
A) It will be regulated by the government because of its excess profits. B) New firms will enter the market to eliminate its profits. C) It will expand its output to take advantage of economies of scale so as to further increase its profit. D) As long as there are entry barriers, this firm will continue to enjoy economic profits.
A statement describing how the world should be
A. is a positive statement. B. would only be made by an economist employed by the government. C. is a normative statement. D. would only be made by an economist speaking as a scientist.
Refer to Table 9.2. (Data are expressed in billions of dollars.)Table 9.2Full Employment Income (Output)Consumers Desire to SpendInvestors Desire to SpendTotal Private SpendingTotal Saving$500$300$250$________$________600375250$________$________700450250$________$________800525250$________$________If the full-employment level of income (YF) in Table 9.2 is $800 billion,
A. The economy is in equilibrium. B. There is an inflationary gap of $250 billion. C. There is a recessionary gap of $275 billion. D. There is a recessionary gap of $25 billion.