If the MPC = 0.75, a decrease in government spending from $875 billion to $840 billion will decrease real GDP by
A) $26.25 billion.
B) $35 billion.
C) $46.67 billion.
D) $140 billion.
D
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Indicate whether the statement is true or false
If a firm increases production, then its:
A. fixed costs stay the same. B. total costs increase. C. variable costs rise. D. All of these are true.
Which of the following is NOT true about a differentiated-product Bertrand duopoly?
A. Firm 1 and firm 2's prices will be equal to marginal cost. B. Firm 1's price will always be less than marginal cost, while firm 2's price will be above marginal cost. C. Firm 1's price will always be above marginal cost, while firm 2's price will be less than marginal cost. D. None of the answers is correct.