When thinking about the economic actions of groups of people, firms, and society, it is reasonable to analyze them with the tools of economic analysis. Discuss
The economic approach can be a useful way to analyze and understand the tradeoffs of economic decisions even if economic agents do not always use this approach to make actual decisions. From an economic point of view, someone who goes shopping for groceries every week has a great deal of practice with how to purchase the combination of goods that will provide the most utility, even if the shopper doesn't phrase decisions in terms of a budget constraint. Government institutions may work imperfectly and slowly, but in general, a democratic form of government feels pressure from voters and social institutions to make the choices that are widely preferred by people in that society.
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If the MPC is 0.75 and the tax rate is 10%, the expenditure multiplier will equal
A) 0.48. B) 1.48. C) 3.08. D) 3.6.
A Texas oil company extracts petroleum and sells it to a refinery for $1,000 . After processing, the refinery sells the gasoline to a wholesaler for $1,500, who then sells it to a gas station for $1,700 . The gas station sells it to customers for $2,500 . In these transactions, how much has been added to GDP?
a. $1,000 b. $1,500 c. $1,700 d. $2,500 e. $6,700
Movement from an inefficient allocation to an efficient allocation in the Edgeworth Box will
A. increase the utility of all individuals. B. increase the utility of at least one individual, but may decrease the level of utility of another person. C. increase the utility of one individual, but cannot decrease the utility of any individual. D. decrease the utility of all individuals.
If a 20 percent increase in the price of a good results in a 60 percent increase in the demand for another good, what is the cross-price elasticity of demand?
a. +3 b. –3 c. +80 d. –40