The fact that the washroom usually has paper towels left (free to the consumer) suggests that the marginal utility of paper towels quickly diminishes to 0 for each consumer
a. True
b. False
A
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An increase in the demand for our exports
a. increases aggregate demand and income by the amount of the investment multiplier. b. increases imports as well, having no impact on aggregate demand. c. increases aggregate demand and income by less than the amount of the investment multiplier. d. does not impact aggregate demand because this is consumption by foreign countries.
The more elastic demand is for a taxed good, the smaller the excess burden associated with the tax.
Answer the following statement true (T) or false (F)
Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.75 generates for every additional $100 of real GDP
A) $25 of additional saving. B) $56.25 of additional consumption spending. C) $25 of additional saving and taxes. D) $75 of additional real disposable income.
A firm in monopolistic competition
A) has no control over the price of the product it is selling. B) might be selling a brand name product. C) does not advertise nor market its product. D) Both answers A and B are correct. E) Answers A, B, and C are correct.