For conducting marginal analysis, individuals compare ______.
A. marginal interest and marginal price
B. marginal wage and marginal yield
C. marginal benefits and marginal costs
D. marginal utility and marginal productivity
Ans: C. marginal benefits and marginal costs
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Nominal income:
A. Reflects the purchasing power of money. B. Is income adjusted for inflation. C. Is the amount of money income, measured in current dollars. D. Is the amount of money income, measured in constant dollars.
Because of a recession in Japan, net exports from the United States decrease by $10 billion. If the MPC is 0.75, how much less spending will occur in the U.S. economy in the second “round” of spending?
A. $17.5 billion B. $10 billion C. $7.5 billion D. $5.0 billion
In a perfectly competitive market, an increase in market demand in a long-run constant-cost industry causes:
A. a decrease in price, a decrease in quantity, and a decrease in profit in the short run. B. an increase in price, quantity, and profit in the long run. C. an increase in price, quantity, and profit in the short run. D. a decrease in price, a decrease in quantity, and a decrease in profit in the long run.
The long-run adjustment to a negative supply shock results in
A) the short-run aggregate supply curve shifting to the right. B) the price level rising. C) unemployment rising. D) workers being willing to accept higher wages.