Marginal propensity to consume
A) is the amount of consumption that is independent of the level of disposable income.
B) is the same as the break-even point.
C) is the proportion of total disposable income that is consumed.
D) gives the amount a person changes planned consumption for a change in real disposable income.
D
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A vertical merger, like the merger of Seagate and Dell, would be attractive
a. only to Dell because it then avoids paying monopoly prices to Seagate. b. only to Seagate because it can then obtain two monopoly rents. c. to both Seagate and Dell but not to consumers who would find no difference in their welfare. d. to Seagate, Dell and consumers, all of whom would stand to benefit in some way.
If marginal cost becomes higher than price, what happens to a company?
(A) The company will lose money on each additional unit produced. (B) Diminishing marginal returns will shrink production. (C) Company specialization will lower the actual price charged. (D) The company will go out of business.
When one observes consumption and investment patterns over time, one finds that:
A. like consumption, investment is fairly stable over time. B. like consumption, investment is fairly erratic over time. C. unlike consumption, which is fairly stable over time, investment is subject to erratic fluctuations. D. unlike consumption, which is subject to erratic fluctuations, investment is fairly stable over time.
Which of the following will happen when the Federal Reserve buys bonds from the public in the open market and the amount of cash held by the public does not change?
A. The required reserve ratio will increase. B. The money supply will decrease. C. The deposits of commercial banks will decline. D. Commercial bank reserves will increase.