Suppose the marginal propensity to consume equals .8 (i.e., c1 = .8). Given this information, which of the following events will cause the largest increase in output?
A) G increases by 200
B) T decreases by 200
C) I increases by 150
D) both A and B
A
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The above figure shows the demand and cost curves facing a monopoly. The monopoly maximizes profit by selling
A) 0 units. B) 25 units. C) 50 units. D) 75 units.
When there are diseconomies of scale in production:
a. long-run average total cost declines as output expands. b. long-run average total cost increases as output expands. c. average fixed cost increases as output expands d. marginal cost decreases as output expands.
Briefly explain what economists mean when they refer to the stock market as a random walk.
What will be an ideal response?
When the marginal propensity to save declines, the
A) multiplier becomes larger and the IS curve becomes flatter. B) marginal propensity to consume increases and there is no effect on the IS curve. C) multiplier becomes larger and the IS curve becomes steeper. D) multiplier declines and the IS curve becomes steeper.