Suppose that someone has a disposable annual income of $50,000 and an MPC=0.8. They allocate $10,000 of that for necessities. The remainder of the income is both spent and saved. Based on this information autonomous consumption is:
A. $10,000.
B. $40,000.
C. $32,000.
D. $50,000.
A. $10,000.
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One way tariffs differ from quotas is that
A) tariffs produce revenues for the importing country's government. B) quotas produce revenues for the exporting country's government. C) tariffs produce no revenues but set limits on the imported items. D) tariffs are applied only on raw materials.
The market demand curve for a product:
A. is the demand of an individual consumer. B. will lie to the right of all of the individual demand curves for a product. C. graphically is the vertical sum of the individual demand curves. D. will lie below all of the individual demand curves for a product.
Which statement is false?
A. Short-run cost assumes a fixed capital size, while long-run cost includes all possible capital levels in determining cost. B. Short-run total cost can never be less than long-run total cost at any given output level. C. Short run ATC and long run ATC are never equal except at the minimum point on the long run ATC curve. D. Long-run marginal cost never intersects long-run average cost as long as increasing returns to scale are present.
The downward sloping aggregate demand curve can be explained in part through the:
A. positive relationship between the price level and net exports. B. negative relationship between the price level and investment spending. C. positive relationship between the price level and consumption. D. All of these are true.