Suppose that when disposable income increases by $1,000, consumption spending increases by $750. Given this information, we know that the marginal propensity to consume (MPC) is
A. 1.33.
B. 4.
C. 0.25.
D. 0.75.
Answer: D
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If the value of marginal product of a worker is $40 and the marginal product of the worker is 8 units, the market price of the good he produces is:
A) $2. B) $5. C) $8. D) $10.
Which of the following policies would be most effective to control inflation?
A) An increase in government spending to shift aggregate demand to the right. B) A decrease in government spending to shift aggregate demand to the left. C) An increase in taxes to shift aggregate supply to the left. D) None of the above would reduce inflation.
Hours of OperationMarginal Cost16212318424530636742
Krystal runs a nail salon and needs to decide how many hours to stay open. Table 2.2 illustrates her marginal costs of staying open for each additional hour. Suppose that we observe Krystal staying open 4 hours per day. If she is following the marginal principle, what must her marginal benefit be?
A. $12 B. $18 C. $24 D. $30
In making labor supply decisions, households weigh
A. the market wage against the value of market produced goods. B. the market wage against the value of their marginal product of labor. C. child care costs. D. the market wage against the value of leisure and time spent in unpaid household production.