You have eaten two bowls of ice cream at Sundae School Ice Cream store. You consider eating a third. As a rational consumer you should make your choice by comparing
a. the benefits from eating all three bowls of ice cream to how much three bowls of ice cream costs.
b. the benefits from eating all three bowls of ice cream to how much one more bowl of ice cream costs.
c. the benefits from eating one more bowl of ice cream to how much three bowls of ice cream costs.
d. the benefits from eating one more bowl of ice cream to how much one more bowl of ice cream costs.
d
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In the Keynesian model, a decrease in real autonomous spending results in a more than proportional decrease in real Gross Domestic Product (GDP) because
A) consumption decreases as a result of lower real disposable income. B) consumption increases while real disposable income decreases. C) real autonomous spending decreases further as real disposable income decreases. D) government spending also decreases.
If labor supply is perfectly inelastic, the imposition of a payroll tax legislated to be paid by firms will do all of the following except
A. reduce the wage rate by exactly the amount of the tax. B. generate tax revenue paid to the government. C. leave employment levels unchanged. D. reduce total output. E. leave firm profits unchanged.
Suppose Botswana doubles its income in 6 years while South Africa doubles its income in 9 years. According to the rule of 72, the growth rate in Botswana is:
A. 3 percentage points higher than the growth rate in South Africa. B. 4 percentage points higher than the growth rate in South Africa. C. 12 percentage points higher than the growth rate in South Africa. D. 8 percentage points higher than the growth rate in South Africa.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.