If the marginal propensity to consume is 0.60, then the multiplier equals
A. 1.67.
B. 0.40.
C. 0.60.
D. 2.50.
Answer: D
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Positive technological change in the production of LCD televisions caused the price of LCD televisions to fall. Holding everything else constant, how would this affect the market for Blu-ray players (a complement to LCD televisions)?
A) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease. B) The demand for Blu-ray players would decrease because consumers could afford to buy fewer LCD televisions and Blu-ray players. C) The demand for Blu-ray players would increase and the equilibrium price of Blu-ray players would increase. D) The supply of Blu-ray players would increase and the equilibrium price of Blu-ray players would decrease.
Empirical studies that suggest differences in utilization rates between fee-for-service and managed care plans
a. are unreliable due to statistical biases. b. conclude that financial incentives are not the reason for differences in the amount of care physician provide. c. show no differences in health status among patient groups. d. are unable to differentiate between the impacts due to financial incentives and those due to clinical rules.
If a firm is using a resource hired in a perfectly competitive market, and if the marginal resource cost is less than its marginal revenue product,
a. more of the resource should be used. b. less of the resource should be used. c. the firm should pay a lower price for the resource. d. the firm should pay a higher price for the resource. e. the firm is using the optimal amount of the resource.
Assume that the nominal exchange rate increases by 2%. If prices (both domestic and foreign do not change), we know that
A) domestic goods are now relatively cheaper. B) domestic goods are now relatively more expensive. C) foreign goods are now relatively cheaper. D) both B and C