In Macroland, autonomous consumption equals 100, the marginal propensity to consume equals 0.75, net taxes are fixed at 40, planned investment is fixed at 50, government purchases are fixed at 150, and net exports are fixed at 20. Autonomous expenditure equals:
A. 290 + 0.75Y.
B. 290.
C. 320.
D. 320 + 0.25Y.
Answer: B
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If producers incorrectly set the price of their product too high:
A. a shortage will result. B. a surplus will result. C. equilibrium will result. D. the industry will die out soon.
The marginal revenue product of capital is the
a. same as the marginal revenue product of labor if all resources are used b. same as the marginal physical product of capital in a perfectly competitive market c. change in the interest rate when a firm borrows $1 to buy new capital d. change in total revenue generated by an additional $1 of loanable funds e. price of adding one more machine to production
A relationship-specific exchange occurs when:
A. specialized investments are important. B. a partnership is dissolved. C. shareholders receive dividends. D. a partnership is initiated.
An increase in demand and a decrease in supply cause which of the following?
A. Equilibrium price change is indeterminate. B. Equilibrium quantity decreases. C. Equilibrium price falls. D. Equilibrium price rises.