If a firm sells 20 units of output at $15 per unit and 21 units of output when price is reduced to $14, its marginal revenue from selling the last unit is
A) $6.
B) $21.
C) $294.
D) -$6.
D
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If the MPC is 0.8 and the tax rate is 20%, the expenditure multiplier will equal
A) 1.19. B) 2.78 C) 4.0. D) 6.0.
A citizen of Mexico who has lived in El Paso during the past three years has just sent $100 to relatives in Mexico for Christmas. This transaction is
A) counted in the U.S. balance of payments as a current account item. B) counted in the U.S. balance of payments as a surplus item. C) counted in the U.S. balance of payments as an export item. D) none of the above.
In the U.S., in recent years, comparing M2 to M1 in terms of dollar value, we can say that M2
a. has grown considerably slower than M1 but is still about three times its size b. has grown faster than M1 and is about three times its size c. has grown faster than M1 but is still less than half the size of M1 d. has grown considerably slower than M1 and is less than half the size of M1 e. is about the same size as M1, varying only slightly with changes in money velocity
Suppose that a price-taking firm charges $12 for its product and has a cost function given by C(Q) = 2Q + (Q2/60). The corresponding marginal cost is given by MC(Q) = 2 + (Q/30). How much output should the firm produce? What if the firm has $2,000 of avoidable fixed costs?
What will be an ideal response?