If the marginal propensity to save is 0.4 and disposable income decreases from $2,000 to $1,000, saving will
A. decrease by $400.
B. decrease by $80.
C. increase by $80
D. increase by $400.
Answer: A
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A) diminishing returns B) random chance C) decisions about how much human capital to acquire D) profit E) the replication of activities
A monopolistic competitor shuts down production in the short run if ________
A) marginal revenue equals marginal cost B) marginal cost equals average cost C) total revenues do not cover variable costs D) total revenues do not cover fixed costs
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A) is constant. B) equals the marginal productivity of labor. C) Both A and B above. D) Either A or B above but not both.
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