With reference to the consumption function, the 45-degree line represents
A. all points at which planned real saving is equal to real disposable income.
B. all points at which real disposable income is equal to real consumption spending.
C. the planned savings function.
D. all points at which planned real saving is equal to planned real consumption spending.
Answer: B
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In which of the following cases would the price elasticity of demand be expected to increase?
A) The number of close substitutes for the good increases. B) The time period under consideration decreases. C) The cost of the good relative to total income decreases. D) The supply of the good increases.
The government prefers an ad valorem tax to a specific tax that reduces the monopoly output by the same amount because
A) consumers are not harmed by the ad valorem tax. B) the monopoly prefers the ad valorem tax. C) consumers prefer the ad valorem tax. D) the ad valorem tax transfers more revenue from the monopoly to the government.
A country is strongly outward-oriented if there is less or no control on international trade
a. True b. False Indicate whether the statement is true or false
The external marginal cost of producing coal is MCexternal = 6Q while the internal marginal cost is MCinternal = 4Q. The inverse demand for coal is given by P = 120 ? 2Q. What is the socially efficient level of output?
A. 10 B. 15 C. 20 D. 8