In the above figure, what is autonomous consumption?
A) $3.0 trillion B) $1.0 trillion C) $0.0 trillion D) $2.0 trillion
B
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Mary and Jane are partners in a business. Their business is growing but has not yet reached the point where they can afford a new delivery truck. Jane owns an old truck that she has not been using. She decides to donate it to their business for free
A) This transaction (donation) involves no economic cost. B) This transaction involves both economic cost and accounting cost. C) This transaction involves economic cost but no accounting cost. D) This transaction involves no economic cost and no accounting cost.
When price is below average variable cost, a firm in a competitive market will
a. shut down and incur fixed costs. b. shut down and incur both variable and fixed costs. c. continue to operate as long as average revenue exceeds marginal cost. d. continue to operate as long as average revenue exceeds average fixed cost.
Conceptually, a country's GDP equals the:
A. difference between the value of its final output and the value of the intermediate goods used to produce that output. B. sum of the value added at all stages of production. C. sum of the value of its final output and the value of the intermediate goods used to produce that output. D. sum of the value of all the intermediate goods used to produce final output.
In general, individuals and nations should specialize in producing those goods for which they have a(n):
A. absolutely comparative advantage. B. comparative advantage. C. absolute advantage and a comparative advantage. D. absolute advantage.